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Sangoma Reports Second Quarter Results for Fiscal 2012Continuing Solid Growth and Record Quarterly Revenue (February 09, 2012)
MARKHAM, ONTARIO -- (Marketwire) -- 02/10/12 -- 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 2012 ended December 31, 2011.
Sales for the second quarter of fiscal 2012 ended December 31, 2011 were $3.43 million, a record for quarterly revenue at Sangoma, and around 15% higher than both the quarter ended December 31, 2010 and the first fiscal quarter of 2012.
"Delivering a quarter with 15% growth over the same quarter in the previous year is another very positive sign that our new strategy at Sangoma is working" said Bill Wignall, President and CEO of Sangoma. "Our focus on R&D to drive innovation and new product launches, as well as on marketing and sales to increase awareness and expand our geographic presence, is continuing to deliver solid revenue growth. It is especially gratifying to see significant revenue from new products such as our SS7 and Vega gateways, including sales through channels we obtained as part of the VegaStream acquisition, further evidence of both product and sales synergies from that transaction."
The following chart shows the key metrics tracked by the Company using the IFRS accounting standards.
---------------------------------------------------------------------------- Q2 FY2012 Q2 FY2011 Change Q1 FY2012 Change Sales $ 3.43 m $ 2.98 m 15% $ 3.01 m 14% Gross profit $ 2.51 m $ 2.30 m 9% $ 2.19 m 15% Operating Expense $ 2.32 m $ 1.89 m 23% $ 1.38 m 68% Operating Income(1) $ 0.19 m $ 0.41 m (54%) $ 0.81 m (77%) Net income $ 0.17 m $ 0.31 m (45%) $ 0.47 m (64%) Net earnings per share (fully diluted) $ 0.006 $ 0.010 $ 0.015 EBITDA(1) $ 0.33 m $ 0.55 m (40%) $ 0.93 m (65%) ----------------------------------------------------------------------------
Following the transition to IFRS, all fiscal 2011 numbers have been updated to reflect the IFRS accounting conventions and will not match 2011 numbers previously reported under Canadian GAAP, as explained in the interim financial statements and MD&A. (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 published today at www.sedar.com.
Gross margin for the quarter was $2.51 million, an increase of 9% from the same period in fiscal 2011, and 14% above the immediately preceding quarter. As a percentage of revenue, gross margin was approximately 73%. This is 4% lower than that of the quarter ended December 31, 2010 which reflects the new product mix having a slightly lower gross margin.
Operating expenses for the quarter ended December 31, 2011 were $2.3 million, 23% higher than those of the quarter ended December 31, 2010. Sangoma continues to invest in new marketing, sales and product development initiatives, and this quarter is also the first full quarter of operating expenses deriving from the VegaStream acquisition. That business has been fully integrated during the second quarter, the Vega gateway products have been manufactured in volume, and that entire product portfolio is now fully stocked and selling. Second quarter operating expenses appear higher than the first quarter by 68%, but this is primarily because the difference is heavily dominated by a large swing in foreign exchange expense, from a gain of $0.6 million in the first fiscal quarter to a loss of $0.1 million this quarter. This swing represents $0.7 million of the $0.9 million difference in operating expenses between first and second quarters of fiscal 2012.
Operating Income (revenue less expenses before financing and one-time costs) was $0.19 million for the fiscal second quarter, versus $0.41 million in the same quarter last year.
Net Income for the fiscal second quarter of 2012 was $0.17 million ($0.006 per share fully diluted) compared to Net Income of $0.31 million ($0.010 per share fully diluted) for the fiscal second quarter of 2011.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") for the quarter ended December 31, 2011 was $0.33 million, versus the $0.55 million in the same quarter one year ago.
President and CEO, Bill Wignall, and CFO, David Moore will host a conference call on Monday February 13, 2012 at 4pm 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.
About Sangoma Technologies Corporation
Sangoma is a leading provider of hardware and software components that enable or enhance IP Communications Systems for both telecom and datacom applications. Enterprises, SMBs and Carriers in over 150 countries rely on Sangoma's technology as part of their mission critical infrastructures. Through its worldwide network of Distribution Partners, Sangoma delivers the industry's best engineered, highest quality products, some of which carry the industry's first lifetime warranty. The product line includes data and telecom boards for media and signal processing, as well as gateway appliances and software.
Founded in 1984, Sangoma Technologies Corporation is publicly traded on the TSX Venture Exchange (TSX VENTURE:STC). Additional information on Sangoma can be found at: www.sangoma.com.
Cautionary Statement Regarding Forward Looking Statements
This press release contains forward-looking statements, including statements regarding the future success of our business, development strategies and future opportunities.
Forward-looking statements include, but are not limited to, statements concerning estimates of expected expenditures, statements relating to expected future production and cash flows, and other statements which are not historical facts. When used in this document, the words such as "could", "plan", "estimate", "expect", "intend", "may", "potential", "should" and similar expressions indicate forward-looking statements.
Although Sangoma believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Forward-looking statements are based on the opinions and estimates of management at the date that the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in forward-looking statements. Sangoma undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by law.
Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other events contemplated by the forward-looking statements will not occur. Although Sangoma believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct as these expectations are inherently subject to business, economic and competitive uncertainties and contingencies. Some of the risks and other factors which could cause results to differ materially from those expressed in the forward-looking statements contained in the management's discussion and analysis include, but are not limited to changes in exchange rate between the Canadian Dollar and other currencies, changes in technology, changes in the business climate, changes in the regulatory environment, the decline in the importance of the PSTN and new competitive pressures. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Sangoma Technologies Corporation
Chief Financial Officer
(905) 474-1990 Ext. 107
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