SOURCE: Rapid Link, Inc.

March 17, 2008 13:10 ET

Rapid Link Announces 1st Quarter Fiscal 2008 Financial Highlights

Positive Operating Income; Earnings per Share and Gross Profit Show Significant Improvement; Rapid Link Reaches Profitability Goals and Exceeds Management's Expectations

OMAHA, NE--(Marketwire - March 17, 2008) - Rapid Link, Inc. (OTCBB: RPID), one of the leading providers of diversified communication services, announced financial results for its first quarter ended January 31, 2008.


--  Operating Income of $28,831, an improvement of $535,289 compared to
    the same period last fiscal year.
--  Gross profit increased to over $1.29 million, or 22%, as compared to
    first quarter fiscal 2007; general and administrative expenses decreased
    $187,000, or 23%, as compared to first quarter fiscal 2007.
--  Net income excluding non-cash items of $127,457 for the three months
    ended January 31, 2008, an improvement of $485,331 over the same period
    last fiscal year.
                                         Quarter Ended January 31,
                                         2008                2007
                                    --------------      --------------

Total Revenue                       $    4,013,479      $    4,452,977
Gross Profit                        $    1,297,708      $    1,064,209
Operating income (loss)             $       28,831      $     (506,458)
Net income (loss)
 excluding non-cash items           $      127,457      $     (357,874)

With over 15,000 customers worldwide, Rapid Link is poised to grow with technologies, further serve our customer base of customers and expand into new markets. We have fully integrated Telenational Communications into our operations, and recently completed the asset purchase of Web-Breeze Networks and Communications Advantage, which include a wireless broadband network. We expect to close the acquisition of One Ring Networks, Inc., in our second fiscal quarter of 2008.

"We are pleased to have been able to back up our strong 2007 year-end numbers and earnings with a solid first fiscal quarter of 2008. As we continue to grow through both organic means and strategic acquisitions, we have set our sights on an aggressive yet attainable growth model for the balance of our fiscal year," stated Chris Canfield, Rapid Link's President and Chief Financial Officer.

Excluding non-cash items, net income available to common stockholders for the quarter ended January 31, 2008 was $127,457 vs. a net loss to common stockholders of $357,874 for the previous quarter ended January 31, 2007, representing a $485,331 improvement. For the three months ended January 31, 2008, Rapid Link incurred $154,189 in non-cash interest expense. Additional non-cash items incurred during the year include depreciation and amortization expense, share-based compensation expense, bad debt expense, and loss on property and equipment.

Net income (loss) before non-cash items is not a term defined by generally accepted accounting principles (GAAP) and may not be comparable to other similarly titled measurements used by other companies. Such non-GAAP measures should be considered in addition to, and not as a substitute for, performance measures calculated in accordance with GAAP. The accompanying table includes a detailed reconciliation of net loss reported in accordance with GAAP to net income (loss) before non-cash items.


                                                Quarter Ended January 31,
                                                   2008          2007
                                              -------------  -------------

Revenues                                      $   4,013,479  $   4,452,977

Costs and expenses:
  Costs of revenues                               2,715,771      3,388,768
  Sales and marketing                               232,887        312,525
  General and administrative                        817,701      1,005,578
  Depreciation and amortization                     218,289        242,524
  Loss on disposal of property and equip.                 -         10,040
                                              -------------  -------------
  Total costs and expenses                        3,984,648      4,959,435
                                              -------------  -------------

Operating income (loss)                              28,831       (506,458)

Other income (expense):
  Noncash financing expense                        (154,189)      (367,885)
  Related party non-cash financing expense                -         (8,272)
  Interest expense                                  (64,485)       (71,224)
  Related party interest expense                    (65,269)       (82,357)
  Foreign currency exchange gains                     2,324          1,508
  Other                                                   -          2,103
                                              -------------  -------------
  Total other expense                              (281,619)      (526,127)
                                              -------------  -------------

Net loss                                      $    (252,788) $  (1,032,585)
                                              =============  =============

Loss per share:
  Basic and diluted loss per share            $       (0.00) $       (0.02)
                                              =============  =============

Net loss                                           (252,788)    (1,032,585)

Excluding Non-Cash Items:
  Non-cash financing expense                   $    154,189  $     376,157
  Depreciation and amortization                     218,289        242,524
  Bad debt expense                                   (1,027)        40,000
  Loss on disposal of property and equip.                 -         10,040
  Share-based compensation expense                    8,794          5,990
                                              -------------  -------------

Net income (loss) excluding non-cash items     $    127,457  $    (357,874)
                                              =============  =============

Net Income (Loss) before Non-Cash Items Financial Disclosure

Investors are cautioned that net income (loss) before non-cash items contained in this press release and the aforementioned financial information is not a financial measure under generally accepted accounting principles. In addition, it should not be construed as an alternative to any other measures of performance determined in accordance with generally accepted accounting principles, or as an indicator of Rapid Link's operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that it fails to address. Net income (loss) before non-cash items is presented because Rapid Link believes that it is helpful to some investors as one measure of Rapid Link's operations. Rapid Link cautions investors that non-GAAP financial information such as net income (loss) before non-cash items, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare Rapid Link's results with the results from other reporting periods and with the results of other companies.

The information in this news release and other materials released by Rapid Link from time to time include certain forward-looking statements that are based upon management's expectations and assumptions about certain risks and uncertainties that can affect future events. When used in the materials the words "anticipate," "believe," "estimate," "expect," "future," "intend," "plan" or the negative of these terms and similar expressions as they relate to Rapid Link or Rapid Link's management identify forward looking statements. Such statements reflect the current view of Rapid Link with respect to future events and are subject to risks, uncertainties, assumptions and other factors (including the risks contained in the sections of Rapid Link's reports filed with the Securities and Exchange Commission entitled "Risk Factors") relating to our industry, our operations and results of operations, our ability to continue as a going concern, our pledge of substantially all of our assets to creditors, competition in our industry, changes in technology relating to broadband wireless Internet, potential for dilution, compliance with the Section 404 of the Sarbanes-Oxley Act of 2002, volatility and uncertainty related to trading on the OTC Bulletin Board, penny stock rules, availability and cost of our present vendors and suppliers, change in government regulations and costs associated with data transmission over the Internet or termination of transmissions in foreign countries. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned. Although Rapid Link believes that the expectations reflected in the forward looking statements are reasonable, Rapid Link cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, Rapid Link does not intend to update any of the forward-looking statements to conform these statements to actual results. The following discussion should be read in conjunction with Rapid Link's reports filed with the Securities and Exchange Commission.

About Rapid Link, Inc.

Rapid Link is a facilities-based, Diversified Communication Services company providing various forms of voice, internet and data services to wholesale and retail customers throughout the world. We offer a wide array of communication services targeted to individuals, enterprises and wholesale customers. We continue to seek opportunities to grow our business through strategic acquisitions of fixed wireless, fiber and other diversified communication operators that complement our business model. The Diversified Communication Services industry continues to evolve towards an increased emphasis on Ethernet based products and services. We have focused our business towards these types of products and services. Furthermore, we believe the use of our networks, either as a stand alone solution or bundled with other IP products, provide our customers with the best possible communications experience.

We seek to provide our services to high average revenue per user customers via WiMAX, fixed wireless, and fiber optic transport. Typically, these customers are small to medium size businesses, enterprises and carriers. We recognize that these customers require a reliable and cost-effective voice solution. We plan to offer an integrated product that includes local and long distance calling with internet access in order to satisfy this demand. Concurrently, we remain focused on the growth of our internet offerings to residential customers in underserved areas.

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