MARKHAM, ONTARIO, November 26, 2013 – Sangoma Technologies Corporation (TSX VENTURE:STC), a leading provider of hardware and software components that enable or enhance IP Communications Systems for both voice and data, today announced highlights of its unaudited consolidated interim financial statements under IFRS for the first quarter of fiscal 2014, ended September 30, 2013.
Sales for the first quarter of fiscal 2014 were $2.74 million, down from $3.02 million in the first quarter of fiscal 2013. As in previous years, Sangoma’s sales in the first quarter were well below those of the fourth quarter in the prior year, owing to seasonally lower demand during summer months, a trend that the company expects will continue.
“Our revenue was lower than we anticipated this quarter, especially after a record end to fiscal 2013”, said Bill Wignall, President and CEO of Sangoma. “We believe this is a timing issue, due primarily to the lumpiness we described last year, since Sangoma is now deriving revenues from larger customers with longer sales cycles, and this makes it difficult to forecast when a particular order will be received. We remain focused on growth and we believe that our strategy of developing new products, for sales to new customer segments in new geographies, will deliver that growth in fiscal 2014. The ongoing economic climate and the transition away from PSTN-based products make this challenging, but in spite of the soft revenue this quarter producing a modest operating loss, we can now see the benefits of the restructuring undertaken recently. That process is now complete and we will see the full effect of the cost savings in the second quarter ending December 31, 2013. Finally, I’m pleased to see Sangoma generate positive cash in an otherwise tough quarter”
------------------------------------------------------------------ | |Q1 FY2014|Q1 FY2013|Change|Q4 FY2013|Change| |----------------------------------------------------------------| |Sales |$2.74 m |$3.02 m |(9%) |$4.00 m |(32%) | |----------------------------------------------------------------| |Gross Profit |$1.83 m |$2.16 m |(15%) |$2.46 m |(26%) | |----------------------------------------------------------------| |Operating Expense |$2.03 m |$2.15 m |(6%) |$2.04 m |(0%) | |----------------------------------------------------------------| |Operating Income (1)|- $0.20 m|$0,01 m | |$0.42 m | | |----------------------------------------------------------------| |Net income |-$0,16 |$0.01 m | |-$3.95 m | | | | m | | | | | |----------------------------------------------------------------| |Net earnings per |($0.006) |$0.000 | |($0.136) | | |share (fully | | | | | | |diluted) | | | | | | |----------------------------------------------------------------| |EBITDA |-$0.09 |$0.13 m | |$0.55 m | | ------------------------------------------------------------------
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.
Gross profit was $1.83 million for the quarter or 67% of revenue, below the 72% in the same period of 2013, and consistent with the percentages experienced over recent quarters which are more representative of Sangoma’s business going forward.
Operating expense for the first quarter was $2.03 million, in line with that of the immediately prior fourth quarter. Operating expenses were 6% below last year’s first quarter reflecting the modest restructuring completed at the end fiscal 2013.
Operating Loss was $0.20 million for the quarter, $0.21 million below that of the same quarter last year, driven by lower sales and gross margins.
Net Loss for the quarter ended September 30, 2013 was $0.16 million ($0.006 per share fully diluted), compared to net income of $0.01 million ($0.000 per share fully diluted) for the quarter ended September 30, 2012.
Sangoma continues to maintain a solid cash balance of $4.33 million, up somewhat from $4.01 million on June 30, 2013. Working capital was $10.42 million as compared to $10.62 million one quarter ago.
The Board of Directors of Sangoma Technologies invites all shareholders to the annual shareholders meeting to be held on December 20, 2013, the details of which have been mailed to shareholders.
President and CEO, Bill Wignall, and CFO, David Moore will host a conference call on Monday December 2, 2013 at 11.30am 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.