MARKHAM, ONTARIO, October 22, 2018 – 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 full year of fiscal 2018, ended June 30, 2018.
For the fourth quarter of fiscal 2018, sales were a record $17.54 million, 128% higher than the same quarter last year and 8% over the immediately preceding quarter. For the full year, revenue was $57.36 million, the highest in Sangoma’s history and 113% above last year. These figures are all without any impact from the company’s most recently completed acquisition of Digium Inc., completed after the end of the 2018 fiscal year.
| Q4 FY2018 | Q4 FY2017 | Change | FY2018 | FY2017 | Change | |
| Sales | $17.54 m | $7.68 m | 128% | $57.36 m | $26.88 m | 113% |
| Gross profit | $9.83 m | $4.93 m | 99% | $30.91 m | $17.53 m | 76% |
| Operating Expense | $8.23 m | $4.52 m | 82% | $26.24 m | $16.05 m | 63% |
| Operating Income1 | $1.60 m | $0.41 m | $4.67 m | $1.47 m | ||
| Net Income | $0.70 m | $0.17 m | $2.45 m | $0.80 m | ||
| Net earnings per share (fully diluted) | $0.017 | $0.005 | $0.060 | $0.023 | ||
| EBITDA1 | $2.54 m | $0.70 m | $6.81 m | $2.61 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 MDu0026amp;A posted today at www.sedar.com.
“Fiscal 2018 has been transformative for Sangoma, with revenue, EBITDA and EPS all more than doubling year-over-year”, said Bill Wignall, President and CEO of Sangoma. “It is great to see the combination of intrinsic growth and the two acquisitions closed in 2018, producing the expected impact on the top line with sales exceeding $17m for the first time in Q4, and delivering EBITDA of over $2.5m for the quarter. I’m thrilled about Sangoma’s prospects following the Digium acquisition, and I’d like to thank everyone at the combined company for their dedication and cooperation, as we work through the integration phase, a process that is going very well so far. Overall, fiscal 2018 was an extremely positive year for Sangoma. The entire team here is eager to deliver a $100m business in 2019 and excited to have grown the company to that stage.”
Gross profit was $30.91 million in fiscal 2018. This produced gross margins of 54% of revenue for the year, a figure that is expected to increase further in fiscal 2019.
Operating expenses were $26.24 million in 2018, up 63% from fiscal 2017, reflecting the additional expense following the 2018 acquisitions, but down significantly as a percentage of revenue from 2017.
EBITDA was $6.81 million for fiscal 2018, up from $2.61 million in the prior year, and operating income was $4.67 million, three times the $1.47 million in fiscal 2017.
Net income for the year ended June 30, 2018 was $2.45 million, over three times that of fiscal 2017. On a per share basis, the $0.060 per share (fully diluted) is more than 2.5 times the $0.023 per share earned last year.
Sangoma continues to manage its balance sheet prudently and finished the year with a cash balance of $15.78 million, of which about $12 million was subsequently used in the acquisition of Digium Inc. Adjusted cash flow from operations of $5.15 million was well above the $2.89 million in fiscal 2017.
Outlook for fiscal year 2019
As previously communicated, Sangoma expects revenue for fiscal 2019 to be approximately $100 million, with about 35% of that being recurring/services revenue. Further the company anticipates generating adjusted EBITDA (excluding one-time costs associated with the Digium acquisition) of $10 million this year, with adjusted EBITDA margins expanding to over 13% by fiscal 2020.
Conference Call
President and CEO, Bill Wignall, and CFO, David Moore will host a conference call on Friday October 26, 2018 at 1p.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.