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Sangoma Technologies Corp
Symbol STC
Shares Issued 28,829,809
Close 2015-05-20 C$ 0.315
Market Cap C$ 9,081,390
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Sangoma earns $250,000 in Q3 fiscal 2015

2015-05-20 19:01 ET - News Release

Mr. David Moore reports

SANGOMA REPORTS RESULTS FOR THIRD QUARTER OF FISCAL 2015

Sangoma Technologies Corp. has released highlights of its unaudited consolidated interim financial statements for the third quarter of fiscal 2015, ended March 31, 2015.

Sales for the third quarter of fiscal 2015 were a record $4.79-million, up 40 per cent from the second quarter of fiscal 2015 ended Dec. 31, 2014, and 38 per cent from the third quarter of fiscal 2014.

"These results start to demonstrate the attractiveness of our recent acquisitions of FreePBX/Schmooze and RockBochs," said Bill Wignall, president and chief executive officer at Sangoma. "We can now see the benefit to Sangoma's top-line gross margin and profitability, as a result of higher software and service components to our business. Customers have reacted well to the joint offerings, so it is gratifying to see Sangoma now able to produce results that validate the strategic fit between the companies. As noted last quarter, revenues in the traditional Sangoma business were below our expectations this past quarter, with sales of some product categories having softened. There was a tremendous amount of work on the part of many people at the combined company, that went into putting the acquisitions together and beginning the integration. With some of that heavy lifting behind us, we now need to refocus on growing all parts of our business, but for the first quarter postacquisitions, this is an encouraging start."

                   FINANCIAL HIGHLIGHTS

                    Q3 FY 2015   Q3 FY 2014  Q2 FY 2015

Sales                  $4.79-M      $3.48-M     $3.42-M
Gross profit           $3.41-M      $2.34-M     $2.16-M
Operating expense      $3.10-M      $2.12-M     $2.06-M
Operating
income                 $0.31-M      $0.22-M     $0.10-M
Net income             $0.25-M      $0.16-M    ($0.16-M)
Net earnings per
share (fully
diluted)                $0.008       $0.005     ($0.006)
EBITDA                 $0.52-M      $0.33-M     $0.16-M

Gross profit was $3.41-million for the quarter or 71 per cent of revenue, which is higher than recent quarters owing to the impact of the new acquisitions.

Operating expense for the third quarter was $3.10-million, 46 per cent higher than the $2.12-million in the same quarter of fiscal 2014, also the result of the higher expense run rate that now exists due to the recent acquisitions.

Operating income was $310,000 for the quarter versus $220,000 in the same quarter last year with the new acquisitions being accretive as expected.

Net income for the quarter ended March 31, 2015, was $250,000 (0.8 cent per share fully diluted) compared with net income of $160,000 (0.5 cent per share fully diluted) for the quarter ended March 31, 2014.

As a result of the consideration paid for the acquisitions, Sangoma had working capital of $6.69-million on March 31, 2015, as compared with $11.35-million on June 30, 2014, providing ample liquidity. The company generated $520,000 of cash from operations during the third quarter.

President and chief executive officer, Mr. Wignall, and chief financial officer, David Moore, will host a conference call on May 25, 2015, at 11:30 a.m. EST to discuss these quarterly results. The dial-in number for the call is 1-800-319-4610. Investors are requested to dial in five to 10 minutes before the scheduled start time and ask to join the Sangoma call.

We seek Safe Harbor.

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