Business broadband solution provider Radiant Communications Corp. has announced the resignation of David Buffett as President and CEO and the appointment of Paul Healy as the interim President and CEO.
Mr. Healey is an experienced telecommunications leader having held executive positions at both BCE and Rogers Communications including President Bell Canada, Western Canada. Mr. Healey’s most recent role was as President & CEO of a national franchise growth company. Mr. Healey’s appointment is effective August 30, 2011.
“On behalf of the Board I’d like to thank David Buffett for his efforts and contributions to Radiant over the past five years,” said Don Calder, Chairman of Radiant. “We believe that with a strong customer base, a superior product portfolio and exceptional service Radiant is extremely well positioned in the small and medium enterprise arena. Paul Healey has tremendous experience and is well versed in the Canadian market. He is an exceptional results driven leader and is a perfect fit to accelerate Radiant’s growth and success.”
Radiant Communications also disclosed its financial results for the second quarter ended June 30, 2011.
- Revenue of $8.1 million for the quarter ended June 30, 2011 increased by 4.9% compared to revenue of $7.8 million for the quarter ended June 30, 2010.
- Gross margin was 38.2% in the quarter.
- EBITDA in the second quarter was $143,171 compared to $126,010 in the second quarter of 2010.
- Net loss in the second quarter of $237,569 amounted to a loss of $0.02 per share.
- The Company ended the quarter with cash and short-term investments of $4.0 million
Revenues for the quarter ended June 30, 2011 increased 4.9% to $8.1 million compared to $7.8 million in the second quarter of 2010. The increase is a result of ongoing installation and activation of new services directed at retailers and larger national businesses as well as the addition of new locations and services to existing customers. Radiant’s revenues are primarily recurring in nature and due to extended two and three year customer contracts quarterly revenue growth is relatively predictable and consistent over time. One time hardware revenues can fluctuate from quarter to quarter depending on the requirements of customer rollouts that occur each quarter.
In the second quarter AlwaysThere virtual services accounted for 6.7% of revenue, up from 4.7% of revenue in the second quarter of 2010. With AlwaysThere services accounting for over 15% of new sales year to date we expect to this high margin business continue to grow.
Revenue in the second quarter of 2011 increased by 2.6% compared to the preceding first quarter of 2011. This increase is attributable to several of our larger customers expanding locations as well as a decrease in the churn of the established base. Surelink revenue was 2.6% of revenue in the second quarter and increased by 33.4% over the preceding first quarter of 2011.
For the quarter ended June 30, 2011, the Company’s gross profit was $3.1 million compared to $3.0 million in the second quarter of 2010. Gross profit as a percent of revenue was 38.2% for the quarter ended June 30, 2011 compared to 38.9% for the same period in 2010 and 40.1% in the immediately preceding quarter. In both the first and second quarters of 2011 Radiant has invested in additional monthly backhaul expenses for the new Surelink Central Office locations. We have also re-signed several of our core long term customers to new multi-year contracts with lower monthly revenue.
Operating expenses, including sales and marketing, general and administrative, and amortization costs of $3.3 million in the second quarter of 2011 increased by 4.8% compared to $3.2 million in the second quarter of 2010 and increased by 3.7% compared to the immediately preceding first quarter of 2011. Historically Radiant has held headcount flat and is committed to managing expenses in a conservative manner while the economic environment begins to stabilize. At the same time the Company is investing in the Surelink product and sees an immediate opportunity to capture market share.
Sales and marketing expenses include compensation expenses, agent and channel distribution, and marketing costs. For the quarter ended June 30, 2011, sales and marketing expense decreased 6.6% to $605,612 compared to $648,576 in the second quarter of 2010. Sales and marketing expenses in the second quarter of 2011 increased by 2.3% compared to sales and marketing costs in the first quarter of 2011.
General and administrative expenses, which include customer care, technical, network, executive and administrative staff, systems development, hardware, software, premises, office, amortization and general expenses, were 7.7% higher at $2.7 million for the quarter ended June 30, 2011 compared to $2.5 million in the second quarter of 2010. The increase is primarily due to the ongoing product development activities mentioned previously as well as investments in our provisioning and billing systems to accommodate our recent high growth rate. General and administrative expenses in the second quarter of 2011 were 0.1% higher compared to the first quarter of 2011.
The Company had a net loss of $237,569 or a loss of $0.02 per share for the quarter ended June 30, 2011 compared to a net loss of $166,199 or $0.01 per share in the second quarter of 2010. The weighted average number of shares outstanding for the second quarter of 2011 was 15.1 million and for the second quarter of 2010 was 14.4 million.
At June 30, 2011 Radiant had cash and short term investments of $4.0 million compared to $4.3 million at December 31, 2010. Radiant has established a consistent record of positive cash flows from operating activities that are sufficient to fund all expected capital acquisitions and non-cash working capital requirements for the existing business. Existing future commitments are primarily for premises and equipment leases and amount to $1.0 million for 2011 and $1.2 million for the remaining four years to 2015. The Company believes it has sufficient funds to ensure ongoing operations and will not require additional funding from capital markets or other sources in 2011.
|Earnings before Interest, Taxes, Depreciation and Amortization is calculated as follows:|
|($000s)||Q2 2011||Q2 2010|
|Operating Income (loss)||$ (236)||$ (173)|
|Stock-based compensation expense||15||28|
|EBITDA||$ 143||$ 126|
In the second quarter of 2011, Radiant achieved EBITDA of $143,171 compared to EBITDA of $126,010 in the second quarter of 2010.
Additional details on the quarter results, including the unaudited Financial Statements and Management Discussion and Analysis, will be made available at Sedar under Radiant Communications Corp.