MARKHAM, ONTARIO, November 17, 2016 – 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 first quarter unaudited consolidated financial statements for fiscal 2017, ended September 30, 2016.
For the first quarter of fiscal 2017, sales were $5.82 million, 24% higher than in the same quarter last year. As in prior years, Sangoma’s revenue in the first quarter was slightly below that of the fourth quarter in the previous fiscal year, owing to seasonally lower demand during summer months, but this effect is less pronounced this year due to the increasing significance of the recurring revenue portion of sales which do not exhibit such seasonal fluctuations.
| Q1 FY2017 | Q1 FY2016 | Change | Q4 FY2016 | Change | |
| Sales | $5.82 m | $4.71 m | 24% | $6.10 m | (5%) |
| Gross profit | $3.77 m | $3.35 m | 12% | $3.75 m | 0% |
| Operating Expense | $3.64 m | $3.20 m | 14% | $3.83 m | (5%) |
| Operating Income1 | $0.13 m | $0.15 m | -$0.08 m | ||
| Net Income | $0.06 m | $0.09 m | -$0.16 m | ||
| Net earnings per share (fully diluted) | $0.002 | $0.003 | ($0.005) | ||
| EBITDA1 | $0.42 m | $0.38 m | $0.19 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.
“This is a very strong start to Sangoma’s new fiscal year 2017”, said Bill Wignall, President and CEO of Sangoma. “In the past, Sangoma has seen a seasonal dip in sales of 10-20% in Q1. This is a secondary, but nevertheless a very nice benefit from the growth in our SaaS/Cloud based services and our software sales/support businesses, as we see that dip substantially lessened this year. It was also good to see some recovery in our international business this quarter, now that we’ve reduced our receivables exposure during the prior year. A first quarter with sales approaching $6 million, EBITDA of over $400 thousand, and cash flow of almost $300 thousand is definitely encouraging.”
Gross profit was $3.77 million for the first quarter, 12% above that of the same quarter last year, and gross margin was 65% of sales, slightly better than in the fourth quarter and in line with our expectations.
Operating expenses were $3.64 million for the first quarter, 14% higher than in the same quarter of fiscal 2016, but at 62% of sales is somewhat lower than the 68% of sales in the first quarter of the prior year.
EBITDA was $0.42 million for first quarter of fiscal 2017, up from $0.38 million in the same quarter last year, and an increase from the $0.19 million in the immediately preceding quarter. Operating income was $0.13 million, slightly lower than the $0.15 million recorded in fiscal 2016, and an improvement from the small operating loss in the prior fourth quarter.
Net income for the quarter ended September 30, 2016 was $0.06 million ($0.002 per share fully diluted), compared to net income of $0.09 million ($0.003 per share fully diluted) for the quarter ended September 30, 2015.
By generating $0.28 million in cash flow, Sangoma finished the quarter with a cash balance of $2.37 million, up from the $2.09 million at the end of fiscal 2016, thereby providing the company with healthy working capital of $6.7 million.
President and CEO, Bill Wignall, and CFO, David Moore will host a conference call on Monday November 21, 2016 at 12pm 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.