Radiant Communications Corp.
TSX VENTURE : RCN

Radiant Communications Corp.

March 19, 2008 09:15 ET

Radiant Communications Announces 2007 Year End Results

Company records fifth consecutive quarter of positive EBITDA, twenty-third consecutive quarter of revenue growth and $0.04 EPS

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 19, 2008) - Radiant Communications Corp. ("Radiant") (TSX VENTURE:RCN), Canada's leading supplier of Broadband Solutions for Business™, today announced its financial results for the fourth quarter and year ended December 31, 2007.

HIGHLIGHTS:

- Revenue of $21.8 million for the year increased by 13.0% compared to revenue of $19.3 million for 2006.

- Revenue in Q4 of 2007 was $5.8 million, the Company's 23rd consecutive quarter of revenue growth and a 17.9% increase over Q4 of 2006.

- Gross margin was 50.0% for the year and 48.7% in the fourth quarter.

- Annual operating expenses, not including amortization, increased by 2.9%, validating Radiant's scalable growth model.

- In the fourth quarter of 2007 the Company recorded EBITDA of $623,761 and EBITDA for the year was $1.8 million, an increase of 54.8% over 2006 (see EBITDA section for reconciliation to GAAP).

- Positive net income in 2007 of $414,564 amounted to $0.04 per share with Q4 2007 EPS of $0.02.

- The Company ended the current year with cash and short-term investments of $3.1 million and generated cash from operations of $1.3 million during 2007.

- Radiant announced several new products and services to meet the growing security and managed service needs of new and existing clients including: IP based digital telephony, the roll out of a national private IP network and the launch of AlwaysThere™ Hosted Exchange.

- Radiant continued the roll out of existing high value customers during the year including Wal-Mart, Dollarama, HDS Retail, VANCO, First Ontario Credit Union, Burger King, Blacks Photo, MoneyMart, Rentcash, Lululemon and Liquor Stores of Alberta.

"I am extremely pleased with our 2007 results," said David Buffett, President and CEO of Radiant. "For 2007 we challenged ourselves to profitably grow our business, improve customer satisfaction and advance the strategic value of the business by launching new products and services that significantly improve the revenue per location we capture. Our team accepted the challenge and produced our best financial results ever. We generated significant revenue growth, a profitable bottom line and positive cash flow from operations. At the same time we rolled out several very large multi-location customers, established a nation-wide private IP network and significantly increased the number of managed service locations. Most importantly, we rolled out our AlwaysThere™ virtual application hosting service that substantially increases our addressable market and revenue per customer, all funded by ongoing operations. I am also very pleased to say that our focus on customer care and satisfaction has been well received by our customer base as evidenced by our ongoing customer satisfaction surveys."

In September, Radiant announced a new service called AlwaysThere™ Hosted Exchange. Based on grid computing, and powered by VMware®, Radiant's AlwaysThere™ Hosted Exchange provides Small and Medium Enterprises, SME's, with a secure and fully redundant Exchange environment with continuous back-ups, and virtually unlimited disk space.

"In January of this year, after thorough testing, we commercially launched AlwaysThere™ Hosted Exchange," said Mr. Buffett. "We have signed contracts with a number of customers who are now up and running on our platform. Our focus on virtualization continues to differentiate Radiant in this market. AlwaysThere Hosted Exchange enables Radiant to offer both software and hardware as a service to the underserved SME market."

At a meeting of the board of directors held to approve the 2007 financial disclosures the Company granted 30,000 stock options to Mr. Ian Power. The options are exercisable at $1.16 per share for a period of five years and vest over 36 months commencing on March 18, 2008. The Company also amended 200,000 stock options previously conditionally granted to Mr. David Buffett exercisable at $1.15 per share. The conditions having been met, these options are exercisable for a period of 5 years commencing March 18, 2008 and vest over a period of 36 months.

Additional details on both the financial year and fourth quarter results, including the Audited Financial Statements and Management Discussion and Analysis, will be made available at www.sedar.com under Radiant Communications Corp.

Radiant will hold a conference call to discuss its results for the quarter ended December 31, 2007 on March 19, at 2:00 p.m. PDT (5:00 p.m. EDT). Access to the call may be obtained by calling the operator at 1-866-550-6338 (Toll Free North America), or 1-347-284-6930 (International) 10 minutes prior to the scheduled start time, or 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 75457. The audio web cast will be archived for replay on Radiant's web site at www.radiant.net.

Non-GAAP Measures

The Company reports EBITDA because it is a key measure used by management to evaluate the Company's performance. The Company believes that EBITDA is useful supplemental information as it provides an indication of the results generated by the Company's main business activities prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration asset depreciation and other non-cash expenses. EBITDA is not a recognized measure under Canadian GAAP, and accordingly investors are cautioned that EBITDA should not be construed as an alternative to net earnings or loss determined in accordance with Canadian GAAP as an indicator of the financial performance of the Company or as a measure of the Company's liquidity and cash flows. The Company's method of calculating EBITDA differs from other issuers and, accordingly, EBITDA may not be comparable to similar measures presented by other issuers. Please see the schedule below that sets out the Company's EBITDA calculations.



EBITDA

Earnings before Interest, Taxes, Depreciation and Amortization is
calculated as follows:

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($000s) Q4 2007 Q4 2006
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Operating Income $ 260 $ 61
Amortization 257 208
Stock-based compensation expense 106 27
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EBITDA $ 623 $ 296
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Year Ended Year Ended
December 31, December 31
($000s) 2007 2006
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Operating Income $ 729 $ 192
Amortization 896 837
Stock-based compensation expense 150 118
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EBITDA $ 1,775 $ 1,147
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ABOUT RADIANT COMMUNICATIONS

Radiant Communications Corp. (www.radiant.net) provides businesses with a comprehensive range of IP-based data communications services including the largest on-net DSL footprint across Canada, T1 and E10/E100 fibre broadband, MPLS, IPSec, and SSL private networking. From its data centres in Toronto and Vancouver, Radiant also delivers network-based Microsoft Exchange®, email archiving, digital voice, credit/debit payment processing, and disaster recovery services via VMware-powered grid computing facilities directly into customers' private networks.

In operation since 1996, the Company currently serves over 13,000 business locations in Canada and the United States from its offices in Vancouver, Toronto, Montreal, Calgary, and Edmonton.

Broadband Solutions for Business and AlwaysThere are registered trademarks of Radiant Communications Corp. All other trademarks, service marks, registered trademarks, or registered service marks are the property of their respective owners.

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 Radiant'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.



RADIANT COMMUNICATIONS CORP.
BALANCE SHEET
(Expressed in Canadian dollars)

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December 31, December 31,
2007 2006
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Assets
Current assets
Cash and cash equivalents $ 2,534,271 $ 2,162,009
Restricted short-term investments 533,000 533,000
Trade accounts receivable 2,342,465 1,879,905
Inventories 412,972 430,505
Prepaid expenses and deposits 262,741 217,885
Deferred costs 535,302 498,093
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6,620,751 5,721,397

Property and equipment 1,401,203 1,211,135
Goodwill 1,574,228 1,574,228
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$ 9,596,182 $ 8,506,760
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Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and accrued liabilities $ 2,189,748 $ 2,299,745
Customer deposits 164,896 167,146
Deferred revenue 3,418,737 3,082,588
Current portion of deferred lease inducements 16,421 73,973
Current portion of obligations under capital
leases 242,945 505,978
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6,032,747 6,129,430

Deferred lease inducements 11,868 28,290
Obligations under capital leases 133,293 388,050
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6,177,908 6,545,770
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Shareholders' equity
Share capital 3,601,872 2,713,435
Contributed surplus 3,896,618 3,742,335
Deficit (4,080,216) (4,494,780)
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3,418,274 1,960,990
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$ 9,596,182 $ 8,506,760
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RADIANT COMMUNICATIONS CORP.
STATEMENTS OF OPERATIONS, COMPREHENSIVE INCOME AND DEFICIT
(Expressed in Canadian dollars)
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Three months ended
December 31, Year ended December 31,
2007 2006 2007 2006
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(Unaudited) (Unaudited)

Revenue $ 5,818,927 $ 4,935,870 $21,782,269 $19,283,902
Cost of sales 2,985,168 2,339,608 10,964,994 9,320,456
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Gross profit 2,883,759 2,596,262 10,817,275 9,963,446
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Expenses
Sales and marketing 452,106 558,919 2,049,463 2,377,998
General and
administrative 1,864,364 1,767,665 7,143,285 6,556,275
Amortization 256,615 208,242 895,684 837,386
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2,573,085 2,534,826 10,088,432 9,771,659
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Operating income 260,674 61,436 728,843 191,787

Interest expense 39,219 51,958 139,315 237,031
Non-cash interest
expense on warrants - - 3,676 9,407
Other (income)
expenses 36,473 (66,737) 171,288 (91,747)
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Income before
discontinued
operations 184,982 76,215 414,564 37,096

Loss from discontinued
operations - - - (22,168)
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Income and
comprehensive income
for the period 184,982 76,215 414,564 14,928

Deficit, beginning of
period (4,265,198) (4,570,995) (4,494,780) (4,509,708)
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Deficit, end of period $(4,080,216) $(4,494,780) $(4,080,216) $(4,494,780)
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Basic and diluted
earnings per share
before discontinued
operations $ 0.02 $ 0.01 $ 0.04 $ 0.00

Basic and diluted
earnings per share $ 0.02 $ 0.01 $ 0.04 $ 0.00

Weighted average common
shares, used in
computing basic and
diluted earnings per
share 10,925,658 9,825,658 10,898,535 9,825,658

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RADIANT COMMUNICATIONS CORP.
STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)

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Three months ended
December 31, Year ended December 31,
2007 2006 2007 2006
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(Unaudited) (Unaudited)
Cash flows from
operating activities:
Income for the period $ 184,982 $ 76,215 $ 414,564 $ 14,928
Items not involving
cash:
Amortization 256,615 208,242 895,684 837,386
Stock-based
compensation 106,471 27,226 150,607 118,290
Non-cash interest
expense on warrants - 2,351 3,676 9,407
Amortization of
deferred lease
inducements (18,494) (18,492) (73,974) (76,346)
Loss on disposal of
discontinued
operations - (10,095) - (65,952)
Foreign exchange
(gain) loss 47,066 35,492 174,239 47,681
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576,640 320,939 1,564,796 885,394
Change in non-cash
working capital:
Trade accounts
receivable (456,651) (120,770) (462,560) 579,417
Inventories (38,258) 38,771 17,533 (96,100)
Prepaid expenses and
deposits 103,993 (6,211) (44,856) (54,581)
Deferred costs 29,949 (64,905) (37,209) (136,445)
Accounts payable and
accrued liabilities 105,010 483,197 (109,997) (28,248)
Customer deposits (150) (600) (2,250) (26,344)
Deferred revenue 134,467 83,266 336,149 97,833
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455,000 733,687 1,261,606 1,220,926

Cash flows from
investing activities:
Purchase of property
and equipment (238,194) (243,656) (1,085,752) (381,129)
Proceeds of disposal
of discontinued
operations - - - 80,000
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(238,194) (243,656) (1,085,752) (301,129)

Cash flows from
financing activities:
Proceeds from issuance
of common shares - - 888,437 -
Repayment of long-term
debt - - - (47,557)
Payments under capital
leases (71,241) (124,097) (517,790) (461,316)
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(71,241) (124,097) 370,647 (508,873)

Foreign exchange gain
(loss) on cash held in
foreign currency (47,066) (35,492) (174,239) (47,681)
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Increase (decrease) in
cash and cash
equivalents 98,499 330,442 372,262 363,243

Cash and cash
equivalents, beginning
of period 2,435,772 1,831,567 2,162,009 1,798,766
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Cash and cash
equivalents, end of
period $ 2,534,271 $ 2,162,009 $ 2,534,271 $ 2,162,009
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