MARKHAM, ONTARIO, November 14, 2019 – Sangoma Technologies Corporation (TSX VENTURE:STC), a trusted leader in delivering Unified Communications solutions for SMBs, Enterprises, OEMs, and Service Providers, both on-premise and in the cloud, today announced highlights of its first quarter unaudited results of fiscal 2020, ended September 30, 2019.
For the first quarter of fiscal 2020, sales were $28.01 million, 31% higher than the same quarter last year and a record for Sangoma’s first quarter. Revenue this quarter was 7% lower than the immediately preceding quarter, reflecting the typically softer first quarter seasonality compared to the prior year’s fourth quarter, and the significant one-time order in the last quarter of fiscal 2019, both of had been previously communicated.
|Q1 FY2020||Q1 FY2019||Change||Q4 FY2019||Change|
|Sales||$28.01 m||$21.44 m||31%||$30.07 m||7%|
|Gross profit||$17.48 m||$12.44 m||41%||$18.66 m||6%|
|Operating Expense||$15.88 m||$10.63 m||49%||$15.96 m||1%|
|Operating Income1||$1.61 m||$1.81 m||$2.70 m|
|Net Income||$0.91 m||-$1.00 m||$1.74 m|
|Net earnings per share (fully diluted)||$0.013||($0.019)||$0.032|
|EBITDA1||$3.67 m||$2.52 m||46%||$4.12 m||(11%)|
1 Operating Income and EBITDA are metrics used by the Company to monitor its performance and the definitions may be found in the accompanying MD&A posted today at www.sedar.com.
“I am pleased to see revenue once again exceed the prior years quarterly sales for the nineteenth straight quarter”, said Bill Wignall, President and CEO of Sangoma. “And during our first quarter we had a successful, over-subscribed equity raise, to set the scene for the acquisition of VoIP Innovations, LLC (“VI”) during October. The accompanying debt financing also went well, with the transaction subsequently closing just after the end of our first quarter, and the first few of weeks of transition has gone smoothly. We will of course be including VI results from the October 18 th acquisition date, in our second quarter financials. Finally, it was also gratifying to see our progress is being recognized in Deloitte’s ranking of Sangoma at number 11 in their Enterprise Fast 15 rank of Canadian companies for 2019.”
Gross profit was $17.48 million in the first quarter of fiscal 2020 at a gross margin of 62%, 4% higher than for the same quarter last year and continuing the trend of slightly stronger gross margins as the percentage of Sangoma revenue from recurring revenue continues to increase.
Operating expenses were $15.88 million in the first quarter of fiscal 2020, higher than last year which had only one month of Digium expenses, and essentially consistent with the immediately preceding fourth quarter of fiscal 2019.
For the first quarter of fiscal 2020, EBITDA at $3.67 million was 46% higher than in the same quarter last year resulting from the inclusion of Digium sales for the full quarter, the operational efficiencies introduced during fiscal 2019 and the adoption of IFRS 16 at the beginning of this fiscal year.
Net income for the first quarter ended September 30, 2019 was $0.91 million compared to net loss of $1.00 million in fiscal 2019 which included the $2.10 million of one-time transaction costs incurred to complete the acquisition of Digium during the first fiscal quarter of 2019.
Sangoma finished the quarter with a cash balance of $33.40 million, working capital of $27.29 and total debt of $21.70 million. Adjusted cash flow from operations, excluding the impact of acquisitions, was $2.96 million.