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MARKHAM, ONTARIO, November 22, 2018 – Sangoma Technologies Corporation (TSX VENTURE:STC), a trusted leader in delivering Unified Communications solutions, both in the cloud and on-premises, and the provider of the two most widely used open source communications software products in the world, today announced highlights of its first quarter unaudited results of fiscal 2019, ended September 30, 2018. For the first quarter of fiscal 2019, sales were a record $21.44 million, 81% higher than the same quarter last year and 22% more than the immediately preceding quarter. This quarter’s results include one month of the most recently completed acquisition of Digium, which closed in September.
1 Operating Income and EBITDA are metrics used by the Company to monitor its performance and the definitions may be found in the accompanying MDu0026amp;A posted today at www.sedar.com.
“This is the first time in our history in which we have exceeded $20 million in quarterly revenue, and it’s great to see the contribution from Digium on our top line right away”, said Bill Wignall, President and CEO of Sangoma. “The integration work unfolded pretty much as planned during our first quarter and the management teams are jointly working through expected savings during the second quarter, all of which is proceeding well. I’m pleased to see EBITDA more than doubling from last year and at $2.5 million, the first quarter is a quick start that puts us well on track to achieve our $10 million in guidance for the year. We remain very excited about Sangoma’s prospects following the Digium acquisition, and we are now even more confident in our ability to deliver a $100 million business in 2019.”
Gross profit was $12.44 million in the first quarter of fiscal 2019 at a gross margin on 58%, a figure that is expected to increase slightly in future quarters, as Digium results will be included for the entire quarter.
Operating expenses were $10.63 million in the first quarter of fiscal 2019, essentially double those of the prior year as a result of the two acquisitions completed since then.
For the first quarter of fiscal 2019 ended September 30, 2018 both EBITDA at $2.52 million and operating income at $1.81 million were more than double the same period of fiscal 2018.
Net loss for the first quarter ended September 30, 2018 was $1.00 million compared to net income of $0.39 million in fiscal 2018, reflecting the estimated $2.10 million of one-time transaction costs incurred to complete the acquisition of Digium during the quarter.
Sangoma finished the quarter with a cash balance of $5.00 million and total debt of $24.91 million following the completion of the Digium transaction. During the quarter adjusted cash flow from operations, to exclude the impact of the Digium acquisition, was $1.70 million.
Outlook for fiscal year 2019
As previously communicated, Sangoma expects revenue for fiscal 2019 to be approximately $100 million. Further the company anticipates generating adjusted EBITDA (excluding one-time costs associated with the Digium acquisition) of $10 million this year, with adjusted EBITDA margins expanding to over 13% by fiscal 2020.
President and CEO, Bill Wignall, and CFO, David Moore will host a conference call on Friday November 23, 2018 at 12 noon Eastern Standard Time to discuss the quarterly results. The dial-in number for the call is 1-800-319-4610 (International 1-604-638-5340). Investors are requested to dial in 5 to 10 minutes before the scheduled start time and ask to join the Sangoma call.
|Q1 FY2019||Q1 FY2018||Change||Q4 FY2018||Change|
|Sales||$21.44 m||$11.85 m||81%||$17.54 m||22%|
|Gross profit||$12.44 m||$6.12 m||103%||$9.83 m||27%|
|Operating Expense||$10.63 m||$5.37 m||98%||$8.23 m||29%|
|Operating Income1||$1.81 m||$0.75 m||$1.60 m|
|Net Income||-$1.00 m||$0.39 m||$0.70 m|
|Net earnings per share (fully diluted)||($0.019)||$0.011||$0.017|
|EBITDA1||$2.52 m||$1.10 m||129%||$2.54 m||(1%)|