MARKHAM, ONTARIO, February 11, 2014 – 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 second quarter of fiscal 2014, ended December 31, 2013.
Sales for the second quarter of fiscal 2014 were $3.63 million, up 32% from both the same quarter last year in fiscal 2013 and from the immediately preceding quarter this year.
“I’m most pleased to see solid revenue growth this quarter, especially with that growth all coming from new products, while sales of legacy products were quite stable as well”, said Bill Wignall, President and CEO of Sangoma. “I indicated last quarter that we typically experience greater variability in sales these days, depending on timing of significant orders, as we target larger customers with longer sales cycles”. This quarter’s result reflects Sangoma’s focus on growth and we believe that our strategy of developing new products, for sales to new customer segments in new geographies, is the way to deliver that growth. At the same time, we continue to carefully manage expense levels and can now see the benefits of the restructuring undertaken a few months ago. Revenue growth and controlled but targeted spending, logically leads to the healthy bottom line we see this quarter, which enabled modest increases in cash and working capital, maintaining our strong balance sheet.”
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 $2.44 million for the quarter or 67% of revenue, consistent with recent quarters, and in or around the levels the Company expected, depending upon product mix in any particular quarter.
Operating expense for the second quarter was $2.13 million, down $0.07 million (3%) from the $2.20 million last year, due primarily to reduce spending in R&D and G&A, as well as a foreign exchange gain, which partially offset the increased investment in sales and marketing. The mix of spending has also been shifted more towards sales and marketing from R&D and G&A, both of which were helped by the modest restructuring undertaken previously.
Operating income was $0.31 million for the quarter, reflecting the increase in sales and healthy gross profit.
Net Income for the quarter ended December 31, 2013 was $0.22 million ($0.008 per share fully diluted), compared to a net loss of $0.25 million (-$0.009 per share fully diluted) for the quarter ended December 31, 2012.
Sangoma continues to maintain a solid balance sheet with $4.34 million in cash, up from $4.0 million on June 30, 2013 and up slightly from $4.33 million on September 30, 2013. Working capital was $10.71 million as compared to $10.62 million on June 30, 2013.
President and CEO, Bill Wignall, and CFO, David Moore will host a conference call on Thursday February 13, 2014 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.