MARKHAM, ONTARIO, April 30, 2020 – Sangoma Technologies Corporation (TSX VENTURE:STC), a trusted leader in delivering Communications as a Service solutions for businesses of all sizes, service providers and OEMs, today provided an update on its business operations.
“Given the unprecedented global impact of Covid-19 on so many companies, and the fact that many of our shareholders have been asking for preliminary information about how Sangoma is being affected, we have decided to provide this update covering current business operations and some preliminary financial highlights for our third quarter”, said David Moore, CFO of Sangoma. “Sangoma will announce our full financial results later in May, as usual for the third quarter. This one-time preliminary update, due to the highly unusual global situation these days resulting from the coronavirus, will not set a precedent for other quarters in the future, when we expect to return to normal reporting cadence.”
Third quarter results were in line with our previously announced guidance on February 27th. For the 9-month period ending March 31, 2020, Sangoma’s revenues exceeded $96 million, and third quarter revenues exceeded $36 million. EBITDA exceeded $15 million for the same 9-month period, and $6 million for the third quarter.
“We are extremely proud of these results, which is a testament to the hard work of our employees to continue driving forward during these challenging Covid times”, said Bill Wignall, President and CEO of Sangoma. “We believe that we are well positioned to weather the Covid-19 pandemic given our healthy profitability, positive cash flow, and strong balance sheet. And given our preliminary Q3 results and our operations to date, we are cautiously optimistic that we are on track to meet our previously announced guidance for fiscal 2020 of $128 – $132 million for revenue and $19 – $21 million for EBITDA. However, given the uncertainties introduced by the Covid-19 pandemic, we cannot confirm our full 2020 guidance at this time. Instead, we will provide a formal update to guidance in late May, when we release full third quarter results, at which point we expect to have better visibility regarding the economic recovery in the various countries in which we operate . The entire executive team and board of directors would like to thank our employees, customers, and shareholders for your commitment, and we wish everyone good health during these challenging times.”
There continues to be uncertainty regarding the full impact, duration, magnitude and pace of recovery across our operations and markets, due to the evolving nature of the Covid-19 pandemic, and the global economic crisis (including varied governmental responses which may affect our operations, business and prospects). Despite these uncertainties, as noted, Sangoma believes it is very well equipped to weather the storm, and we have taken several proactive steps in an attempt to better manage the challenges of the Covid-19 pandemic. These include:
- Sangoma continues to operate in as close to a ‘business as normal’ manner, as is possible under these conditions, because we are an “Essential Service” under most all government rulings. We are thus exempt from the forced closures that so many other businesses are subject to. Communications is always critical to business, and even more so with so many companies working remotely. We are proud to continue providing our products and services to so many customers who count upon them, during these challenging times;
- Successfully navigating the substantial impact from coronavirus on global supply chains during January and February. Significant work by our operations teams ensured that virtually no customers were impacted in any material way. Sangoma is now through that phase almost entirely;
- Transitioning to a seamlessly reorganized work-from-home structure in over 20 countries and more than 20 states in the U.S., in order to serve our customers who count upon us every day for mission critical communications. This includes maintaining innovation, as demonstrated by the recent release of Sangoma’s new line of headsets and cloud-based video meeting service called ‘Sangoma-Meet’, both of which are essential parts of a remote worker’s toolset. We are proud to offer Sangoma-Meet free of charge during this pandemic;
- Ensuring the company is well positioned, financially, during this crisis. Sangoma has maintained all principal and interest payments on its existing loans, continues to comfortably meet all debt covenants, and as of the end of April, has over $20 million in cash reserves to take advantage of opportunities that may arise, as well as being fully prepared for any further uncertainties during the Covid-19 pandemic. This includes a proactive draw of $9.2 million on our swingline and revolver facilities during April, to strengthen our balance sheet. We also moved decisively, taking prudent expense mitigation steps to appropriately control discretionary spending, as well as introducing new products and customer-focused initiatives to win new clients in need of enhanced communications during this crisis and to secure our existing customer base. Further details will be provided during our conference call described below.
These are just some of the many actions Sangoma has taken, and the advantages the company has, to withstand the current crisis and be well positioned to come out of it stronger than ever. President and CEO, Bill Wignall, EVP Corporate Development, John Tobia, and CFO, David Moore will host a conference call on Friday May 1, 2020 at 8:00 am Eastern Daylight Time to discuss the fuller set of Sangoma’s responses to the Covid pandemic and to provide shareholders an opportunity to ask questions. 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.