MARKHAM, ONTARIO, October 18, 2019 – Sangoma Technologies Corporation (TSX VENTURE:STC), a trusted leader in delivering Unified Communications solutions for SMBs, Enterprises, OEMs, and Service Providers, both on-premises and in the cloud, today announced highlights of its fourth quarter financial results and audited consolidated financial statements for the fiscal year ended June 30, 2019.
As previously announced, sales in the fourth quarter of fiscal 2019 were over $30 million, the first time the company has exceeded this threshold. Annual revenue was $109.6 million, 91% higher than the prior year, and another record. For the full year, EBITDA was $12.3 million, the highest in Sangoma’s history and up very significantly from fiscal 2018.
|Q4 FY2019||Q4 FY2018||Change||FY2019||FY2018||Change|
|Sales||$30.07 m||$17.54 m||71%||$109.65 m||$57.36 m||91%|
|Gross profit||$18.66 m||$9.83 m||90%||$66.83 m||$30.91 m||116%|
|Operating Expense||$15.96 m||$8.23 m||94%||$59.78 m||$26.24 m||128%|
|Operating Income1||$2.70 m||$1.60 m||$7.04 m||$4.67 m|
|Net Income||$1.74 m||$0.70 m||$1.54 m||$2.45 m|
|Net earnings per share (fully diluted)||$0.032||$0.017||$0.028||$0.060|
|EBITDA1||$4.12 m||$2.54 m||$12.30 m||$6.81 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.
“I am very pleased with both top and bottom line results for the full year, the second consecutive year in which we have approximately doubled in size”, said Bill Wignall, President and CEO of Sangoma. “Early in fiscal 19, we announced guidance of $100 million in sales and $10 million of EBITDA, figures that seemed ambitious at the time. I’m particularly proud of our growing team at Sangoma because not only did we further increase our guidance part way through this fiscal year, we have now finished 2019 by exceeding even those revised estimates. We had previously stated that we expected in fiscal 2020 to reach 13% of revenue, and while our guidance for that year is contained in our important other press release being issued today, it’s gratifying to see us exit fiscal 19 being on track with that metric a quarter early. I’d like to thank everyone at the combined company for their strong commitment during the year and our customers around the globe for the trust they put in Sangoma every day with their mission critical needs.”
Gross profit was $66.8 million in fiscal 2019, producing gross margins of over 60% of revenue for the year.
Operating expenses were $59.8 million in 2019, up from fiscal 2018, reflecting the additional expense consistent with higher revenue and following the Digium acquisition early in fiscal 19.
EBITDA was $12.3 million for fiscal 2019, up from $6.8 million in the prior year.
Net income for the year ended June 30, 2019 was $1.5 million, down from fiscal 2018 due to debt service costs, one-time acquisition expenses, and business integrations costs related to the Digium acquisition.
Sangoma continues to manage its balance sheet prudently and finished the fiscal year with a cash balance of $11.7 million, which was further supplemented by the July equity raise. Working capital is $5.3 million and Adjusted cash flow from operations of $13.5 million was well above the $5.9 million in fiscal 2018.
Outlook for fiscal year 2020
Guidance for fiscal 2020 is contained in the other press release being issued today by Sangoma, covering the acquisition which is being announced simultaneously.
President and CEO, Bill Wignall, and CFO, David Moore will host a conference call on Monday October 21, 2019 at 8.00a.m. 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.