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Sangoma Reports Results for First Quarter of Fiscal 2013
By: Marketwired .
Nov. 28, 2012 07:01 PM
MARKHAM, ONTARIO -- (Marketwire) -- 11/29/12 -- 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 first quarter of fiscal 2013, ended September 30, 2012.
Sales for the fourth quarter of fiscal 2012 were $3.02 million, just marginally higher than those of the same period last year. As in prior years, Sangoma's sales in the first quarter were below those of the fourth quarter of the prior year, owing to seasonally lower demand during summer months, a trend that the company expects will continue.
"Our quarterly revenue was slightly below what we would have liked for a first quarter and also just slightly lower than we anticipated", said Bill Wignall President and CEO of Sangoma. "We believe this is a timing issue due primarily to the lumpiness we have described over recent quarters, since Sangoma is now deriving revenues from some larger customers with longer sales cycles, and this can make it difficult to forecast when a particular order might be received. We remain focused on growth and we believe that our strategy of developing more products, for sales to more customer segments in more geographies, will deliver that growth in fiscal 2013. The ongoing economic climate makes this challenging, and while our revenue growth did not match our own expectations, even Sangoma's modest growth in our first quarter continues to outperform our key competitors whose sales have been declining."
---------------------------------------------------------------------------- Q1 FY2013 Q1 FY2012 Change Q4 FY2012 Change Sales $ 3.02 m $ 3.01 m 0% $ 3.71 m (19%) Gross profit $ 2.16 m $ 2.19 m (1%) $ 2.36 m (8%) Operating Expense $ 2.15 m $ 1.38 m 56% $ 2.40 m (10%) Operating Income(1) $ 0.01 m $ 0.81 m (99%) -$0.04 m (125%) Net income $ 0.01 m $ 0.46 m (98%) -$0.31 m (103%) Net earnings per $ 0.000 $ 0.015 $ (0.010) share (fully diluted) EBITDA(1) $ 0.13 m $ 0.68 m (81%) $ 0.09 m 44% ---------------------------------------------------------------------------- (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.
Gross profit was $2.16 million for the quarter or 72% of revenue, slightly below the 73% in the same period of 2012, and somewhat above the percentages experienced over recent quarters which are more representative of Sangoma's business going forward.
Operating expense for the first quarter was $2.15 million, or about one-quarter of a million dollars below that of the immediately prior fourth quarter, as the company's sales and marketing spending is aligned with quarterly revenues. Operating expenses were significantly above last year's first quarter due principally to a large swing in the US/C$ exchange rate. Excluding this foreign exchange impact, the increase in operating expenses was 7% over last year, reflecting the slowing in the rate of expense growth as spending has neared equilibrium.
Operating Income was $0.01 million for the quarter, $0.80 million below that of the same quarter last year, driven primarily by the exchange rate impact noted above.
Net Income for the quarter ended September 30, 2012 was $0.01 million ($0.000 per share fully diluted), compared to net income of $0.46 million ($0.015 per share fully diluted) for the quarter ended September 30, 2011.
Sangoma continues to have a solid cash balance of $4.53 million and had working capital of $11.33 million on September 30, 2012 as compared to $11.39 million on June 30, 2012 one quarter ago.
President and CEO, Bill Wignall, and CFO, David Moore will host a conference call on December 3, 2012 at 11.30am Eastern Standard Time to discuss the quarterly and annual 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. Sangoma's data boards, voice boards, gateways and connectivity software are used in leading PBX, IVR, contact center and data-communication applications worldwide. The product line includes both hardware and software components that offer a comprehensive toolset for deploying cost-effective, powerful, and flexible communication solutions.
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.
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