MARKHAM, ONTARIO, February 4, 2021 – Sangoma Technologies Corporation (TSX VENTURE:STC), a trusted leader in delivering cloud-based Communications as a Service (“CaaS”) solutions for companies of all sizes, today announced highlights of its unaudited condensed interim consolidated financial statements for the second quarter of its fiscal year 2021 ended December 31, 2020.
For the second quarter of fiscal 2021, sales were $35.32 million, 9% higher than in the same quarter last year, and EBITDA was an all-time record $6.84 million, up 32% over the same quarter last year.
“This was another strong quarter for Sangoma, with total sales up 9% from the same quarter last year and our all important Services revenue growing almost 25% over the second quarter of fiscal 2020,” said Bill Wignall, President and CEO of Sangoma. “The solid revenue, reliable gross margin, and expense controls undertaken during the pandemic has delivered our highest quarterly EBITDA ever. As the crisis begins to subside, we will begin to prudently open up spending slightly again, which should bring EBITDA back closer to the range expected in our fiscal 2021 guidance, of around 17%. And of course, this all follows our very exciting announcement last week, of the definitive agreement to acquire Star2Star.”
Gross profit was $23.46 million in the second quarter of fiscal 2021, 10% higher than in fiscal 2020 and with similar gross margin at 66% of revenue.
Operating expenses were $19.68 million in the second quarter of fiscal 2021, up 3% from the second quarter of fiscal 2020, increasing at a rate slower than Sangoma’s revenue growth, as planned.
EBITDA was a record $6.84 million in the second quarter, up by almost one-third from the $5.19 million in the same quarter last year.
Net income for the second quarter ended December 31, 2020 was $2.46 million.
Sangoma continues to maintain a strong balance sheet and finished the quarter with a cash balance of $92.28 million. Working capital closed at $83.43 million as of December 31, 2020 and Adjusted Cash Flow from operations at $6.32 million for the quarter.
Outlook for fiscal year 2021
Sangoma has earlier provided guidance for 2021 of between $143 and $147 million in revenue and between $24 and $26 million in EBITDA. The company is maintaining
those ranges, given second quarter results.
Cyber attack update
Since disclosing the cyber attack in December 2020, Sangoma has been working with a highly experienced group of third-party cybersecurity experts to conduct a fulsome and comprehensive investigation into the incident. The company has provided regular public updates regarding its progress and Sangoma now expects to complete the investigation and report the results this month. As stated in the company’s press release of January 12, while we continue to investigate the incident, we are confident that none of our products or services were impacted, and Sangoma does not expect the cyber attack will have a material impact on sales or on opportunities in the company’s pipeline.
Acquisition of StarBlue Inc. (“StarBlue”)
As requested by the TSX Venture Exchange, the Company wishes to clarify the leadership and governance of Sangoma after the closing of the acquisition of StarBlue.
Bill Wignall will remain as President and CEO of Sangoma and, subject to Shareholder approval of a new Control Person in accordance with TSX-V policies, the resulting
Sangoma board of directors (the “Board”) shall consist of five directors, with Norman Worthington of StarBlue becoming Chairman and with Marc Lederman of NewSpring
Capital, an institutional investor in Star2Star Holdings, LLC (“S2S Holdings”), also joining the Board. The nomination of Norman Worthington and Marc Lederman is
pursuant to a right granted to the sellers’ representative in the stock purchase agreement. S2S Holdings, as sellers’ representative, has exercised this right on behalf of the sellers. With this clarification, the TSX Venture Exchange has confirmed that trading in Sangoma’s common shares will resume effective at the opening on or about Monday, February 8, 2021 in accordance with the TSX Venture Exchange bulletin issued today.
Conference Call
President and CEO, Bill Wignall, Executive Vice President Corporate Development, John Tobia and CFO, David Moore will host a conference call on Friday February 5,
2021 at 11:00 am 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.