MARKHAM, ONTARIO, February 14, 2019 – 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 second quarter unaudited results of fiscal 2019, ended December 31, 2018.
For the second quarter of fiscal 2019, sales were a record $29.22 million, 149% higher than the same quarter last year, already putting Sangoma over $50 million in revenue at the mid year point. This quarter’s results included a full quarter of the most recently completed acquisition of Digium, which closed in September of 2018.
| Q2 FY2019 | Q2 FY2018 | Change | Q1 FY2019 | Change | |
| Sales | $29.22 m | $11.74 m | 149% | $21.44 m | 36% |
| Gross profit | $17.83 m | $5.99 m | 198% | $12.44 m | 43% |
| Operating Expense | $17.03 m | $5.08 m | 235% | $10.63 m | 60% |
| Operating Income1 | $0.79 m | $0.91 m | $1.81 m | ||
| Net Income | -$0.27 m | $0.61 m | -$1.00 m | ||
| Net earnings per share (fully diluted) | ($0.005) | $0.017 | ($0.019) | ||
| EBITDA1 | $2.40 m | $1.27 m | 89% | $2.52 m | (5%) |
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.
“We are all thrilled to see sales approaching $30 million for the first time this quarter”, said Bill Wignall, President and CEO of Sangoma. “As anticipated, the Digium transaction is contributing very positively. Integration is progressing well, organization alignment was completed in December, and customers/partners have embraced the combined entity. As evidenced by revenue growing to almost 2.5 times last year, the company has maintained strong sales momentum, even with all the integration focus. And despite most of the cost savings being realized late in the quarter, EBITDA nearly doubled and we now expect to meet the 13% EBITDA target we had projected for fiscal 2020, well ahead of plan, and by Q4 at the latest.”
Gross profit was $17.83 million in the second quarter of fiscal 2019, resulting in gross margin of 61%, which is well ahead of last year.
Operating expenses were $17.03 million in the second quarter of fiscal 2019, but as indicated, these will come down next quarter as the cost savings realized late in this quarter will be in place for all of Q3.
For the second quarter, EBITDA at $2.40 million was up by 89% over the same period in fiscal 2018.
Net loss for the period was $0.27 million, resulting from the one-time integration costs already completed.
Sangoma generated $3.76 million of adjusted cash flow from operations, is already paying down the debt taken on for the Digium transaction, and finished the quarter with a cash balance of $6.79 million.
Outlook for fiscal year 2019
With revenue past the half way mark and adjusted EBITDA ahead of plan, Sangoma now expects to exceed its previously issued guidance of $100 million in revenue and has raised its adjusted EBITDA (excluding one-time costs associated with the Digium acquisition) to $11 million from $10 million.
Conference Call
President and CEO, Bill Wignall, and CFO, David Moore will host a conference call on Friday February 15, 2019 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.