Sangoma Technologies Corporation (TSX VENTURE: STC) (the
“
Corporation”) announces that, as a result of a
review of its continuous disclosure record by staff of the Ontario
Securities Commission (the “
OSC”), the Corporation
is issuing this news release to clarify certain disclosures made in
its management discussion and analysis for the year ended June 30,
2020 (the “
2020 Annual MD&A”) and for the
three and nine months ended March 31, 2021 (the “
Q3 2021
MD&A” and, together with the 2020 Annual MD&A, the
“
MD&As”).
In the MD&As, the Corporation made certain
disclosures regarding guidance for fiscal year 2020 and fiscal year
2021 which constituted forward-looking information, as such term is
defined in National Instrument 51-102 – Continuous Disclosure
Obligations. The following is additional information to help
investors understand the material factors and assumptions that were
used to develop such forward looking-information.
Clarifying Previously Disclosed Guidance for
Fiscal 2020
On page viii of the 2020 Annual MD&A the
Corporation disclosed that EBITDA for fiscal year 2020 was $21.6
million and that sales for fiscal year 2020 was $131.4 million,
consistent with the updated guidance disclosed in its press release
dated August 13, 2020, wherein the Corporation stated: “Sales for
the fiscal year 2020 are expected to be at the upper end of
guidance, between $131 and $132 million. EBITDA is anticipated to
exceed previously announced guidance of $19-21 million, and thus is
expected to be above $21 million”. The following is additional
information to help investors understand the difference between the
actual fiscal year 2020 results and the previously disclosed
guidance:
- the guidance
for fiscal year 2020 of $19-21 million for EBITDA and $128-132
million in sales in the Corporation’s management discussion and
analysis for the six months ended December 31, 2019 was provided on
February 27, 2020 and was based on certain material management
assumptions at that time which included: (i) the growing
possibility of further disruption in the Corporation’s supply chain
due to Covid-19, including such disruptions as delays in delivery
of its manufactured products from its suppliers, increased pricing
of certain components required by the Corporation, delays and
increased costs in shipping its finish products to its warehouses
and customers; (ii) increasing uncertainty regarding the global
economy and the number and geographic location of regions affected
by Covid-19 around the world; (iii) the slightly softer demand for
one-time product sales due to general market uncertainties and
decreased customer confidence relating to Covid-19 and due to the
decline in the importance of the Public Switched Telephone Network;
and (iv) the impact of IFRS16 on the Corporation’s financial
results. As a result, the Corporation updated its guidance at that
time by slightly lowering revenue guidance to $128 - 132 million
(from $135 to $143 million previously announced on October 18,
2019) but increasing its expected range of EBITDA to $19 - 21
million (from $19 to $20 million previously announced on October
18, 2019).
- in its August
13, 2020 press release, the Corporation updated its expectations
for fiscal year 2020 to the upper end of its prior guidance on the
basis that management’s assumption relating to Covid-19 (other than
some modest softening in product sales) was substantially correct;
and
- in its 2020
Annual MD&A, the Corporation disclosed its audited fiscal year
2020 results which were consistent with the updated guidance from
the August 13, 2020 press release.
Clarifying Previously Disclosed Guidance for
Fiscal 2021
On page xx of the 2020 Annual MD&A, the
Corporation provided guidance for revenue and EBITDA for fiscal
year 2021: “On October 20, 2020 Sangoma provided guidance for
Fiscal 2021 of between $143 and $147 million for revenue and
between $24 and $26 million for EBITDA”. This information
constitutes forward-looking information and the material factors
and assumptions used by management to develop such forward-looking
information were as follows:
- forecasted
sales of between $143 and $147 million in products and services
being achieved, which forecast was based on certain management
assumptions, including continuing demand for the Corporation’s
products and services, no material increase to the Corporation’s
manufacturing, labour or shipping costs;
- no material
fluctuation to the then prevailing foreign currency exchange rate
of approximately US$1: CDN$1.32;
- uninterrupted
availability of components and manufacturing capability for
building the Corporation’s products;
- the ability of
the Corporation’s employees to work from home without any material
impact on productivity; and
- the ability of
the Corporation’s customers to continue their business operations
without any material impact on their requirements for the
Corporation’s products and services.
On page xix of the Q3 2021 MD&A, the
Corporation provided updated guidance for revenue and EBITDA for
fiscal year 2021: “Sangoma is increasing its guidance for fiscal
2021 to approximately $166 million for revenue and $30 million of
EBITDA”. This information constitutes forward-looking information
as well as an update to previously issued guidance contained in a
press release issued by the Corporation on October 20, 2020,
wherein the Corporation stated: “Sangoma is today issuing guidance
for its fiscal year 2021 that started on July 1, 2020. Revenue is
expected to be between $143 and $147 million, and EBITDA is
expected to be between $24 and $26 million for the year”. The
material factors and assumptions used by management to develop such
updated guidance for fiscal year 2021 were as follows:
- the inclusion
of the Star2Star business post-acquisition from April 1, 2021 and
such business continuing to operate and generate results in a
manner consistent with its business preceding the acquisition
closing;
- no material
fluctuation to the then prevailing foreign currency exchange rate
of US$1: CDN$1.26 for the remainder of fiscal year 2021;
- no material
escalation of the Covid-19 pandemic or resulting material and
adverse impact on sales for the remainder of fiscal year 2021;
- the
re-stabilization, in all material respects, of the global supply
chain on availability of, and pricing for, certain components
required by the Corporation for the remainder of fiscal year 2021
(including a modest, temporary increase in investment into parts
and finished goods inventory where possible); and
- no material
escalation in the cost to ship the Corporation’s products to its
warehouses and to its customers during the remainder of fiscal year
2021.
About Sangoma Technologies
Corporation
Sangoma Technologies is a trusted leader in
delivering value-based Communications as a Service (CaaS) solutions
for businesses of all sizes. Sangoma’s cloud-based Services include
Unified Communication (UCaaS) business communications, Meetings as
a Service (MaaS), Communications Platform as a Service (CPaaS),
Trunking as a Service (TaaS), Fax as a Service (FaaS), Device as a
Service (DaaS), and Access Control as a Service (ACaaS). In
addition, Sangoma offers a full line of communications Products,
including premise-based UC systems, a full line of desk phones and
headsets, and a complete connectivity suite
(gateways/SBCs/telephony cards). Sangoma’s products and services
are used in leading UC, PBX, IVR, contact center, carrier networks,
office productivity, and data communication applications worldwide.
Sangoma is also the primary developer and sponsor of Asterisk and
FreePBX, the world’s two most widely used open-source communication
software projects.
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 previously made in the referenced
MD&As regarding the expected fiscal 2021 financial results and
the future success of our business, development strategies and
future opportunities. Forward-looking statements include, but are
not limited to, statements concerning management’s guidance on
sales and EBITDA, 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.
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 referenced MD&As include, but are not limited
to, risks and uncertainties associated with the cost and
integration of Star2Star, the impact of the continuing COVID-19
pandemic, 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, new competitive pressures, the impact of
global supply chain delays, the retention of key staff, the
increase in cost of our components and materials and the impact of
changes to interest rates.
This cautionary statement expressly qualifies
the forward-looking statements contained in this press release and
the referenced MD&As. Sangoma undertakes no obligation to
update forward-looking statements if circumstances or management's
estimates or opinions should change except as required by law.
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 David Moore
Chief Financial Officer(905)474-1990 Ext. 4107
dsmoore@sangoma.com
Sangoma Technologies (TSXV:STC)
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