Radiant Systems, Inc. announced its financial results for the fourth quarter of 2008. Total revenues for the period were $75.3 million, a 7 percent increase over the revenues reported for the same period in 2007. Net income for the fourth quarter was reported at $1.9 million, or $0.06 per diluted share, a decline from 2007's fourth quarter net income of $4.6 million, or $0.08 per diluted share.
The company also announced financial results for the full year of 2008. Total revenues for the period were $301.6 million, a 19 percent increase over the $253.2 million reported for 2007. Net income declined slightly from the $11.8 million earned in 2007 to $11.0 million for 2008.
John Heyman, the Company’s chief executive officer commented, We are pleased with the performance of the business for the year given the weak economic environment. Our revenues were in line with expectations prior to the impact of foreign currency exchange rates. And, we generated strong profitability by reducing our cost structure as we entered the fourth quarter.
The business model we have built continues to show strength during these turbulent times, he added. Our recurring revenue services provide a very strong financial foundation for the Company and give our customers an affordable means to access the value of our solutions. These recurring services contributed 40% of our overall revenues in the quarter versus 30% last year and continue to be the fastest growing component of our revenue stream. And, because our channel model and management incentives create a variable structure for a significant amount of our sales, marketing and compensation costs, we have the flexibility to maintain investments in our products and salesforce.
Heyman continued, While certain restaurant and retail segments are clearly weak, others continue to provide us with a solid, if not strong, demand environment. Our products address the needs of customers who are facing increased pressure in this environment. These products deliver strong returns and quick paybacks. While we believe there is an opportunity to grow in 2009, we are building plans for lower revenue and aligning our cost structure accordingly. We are fortunate to have invested heavily in our product, service and distribution capabilities over the past few years, allowing us to bring value to our customers and expand our market reach.
Mark Haidet, the Company’s chief financial officer, said, “Given the economic environment, we feel it is important to be conservative with our revenue plan and to reduce our cost structure accordingly. While we believe we have numerous opportunities to grow the business, we are planning our cost structure around a conservative revenue range comprised of approximately 45% of revenue from recurring sources, and the remainder coming from contracted business and significantly reduced revenues from our reseller business.”
“Historically our guidance has included approximately 30% recurring revenue, higher run rates in our reseller business and required more significant revenue from new contracts. We anticipate maintaining a minimum adjusted operating margin of approximately 12% for the year based on cost management and variable elements of our compensation model. We are modeling a cash tax rate of approximately 28%. We believe this level of performance will allow us to generate free cash flow in excess of $15 million for the year and ensure a strong balance sheet to support our continued investments and commitments, he concluded.