Sangoma Reports First Quarter Results for Fiscal 2012

Sangoma Technologies Corporation, a leading provider of hardware and elements that enable or enhance IP Communications Systems for both voice and data, today announced highlights of its unaudited consolidated interim financial statements in accordance with IFRS for the first quarter of fiscal 2012 ended September 30, 2011.

David Moore, Sangoma's Chief Financial Officer at that time continued, "We hope to see our underlying revenue grow throughout the year, from our first fiscal quarter through our fourth fiscal quarter, as we did in fiscal 2011. And then and there in most years we would anticipate a modest decline in sales from our fourth quarter to our first quarter in the following year due to summer seasonality especially in Europe. Typically we look for first quarter sales to be so then above our revenue in the same period of the prior year. In other words precisely what we're seeing this quarter, with a solid performance of 20% growth versus our first quarter last year, and a slight decline from last quarter of about 7%."

The quarter

Gross margin for the quarter was $2.19 million, an increase of about 20% from the same period in fiscal 2011, and was roughly 73% of revenue which is in line with that of the quarter ended September 30, 2010.

Operating Income was $0.81 million for the fiscal first quarter, an increase of 125% compared to $0.36 million in the right away preceding quarter and of 912% compared to the $0.08 million in the same quarter last year.

During this first quarter of fiscal 2012, the Company acquired all the key assets of the VegaStream Group of Companies, a leading UK-based developer of VoIP (Voice over Internet Protocol) appliances. The business of the former VegaStream has been fully integrated into Sangoma operations and the acquired product line was already generating revenue in fiscal Q1. Sangoma is investing in new marketing, sales and product development initiatives, and this transaction is furthermore evidence of such investments to drive ongoing growth. The acquisition of VegaStream helps Sangoma to achieve several of its strategic objectives including broadening its portfolio, adding to its distribution network, delivering existing channel partners a more comprehensive set of products, affording Sangoma an EU office to enable better service to this critical part of the world in local time zones, expanding its customer base and customer segments, and furthermore penetrating into developing regions, including significant upside in the key market of India with some excellent large customers. In accordance with IFRS, the transaction cost and associated fees are recorded in the period in which they are incurred which is this first quarter of fiscal 2012, and have been shown as a separate expense line on the statement of comprehensive income.

Leading provider of hardware

Sangoma is a leading provider of hardware and elements 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 research 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 then as appliances and software.

This press release contains forward-looking statements, including statements regarding the future success of our business, development strategies and future opportunities.

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 opportunity that the predictions, forecasts, projections and other events contemplated by the forward-looking statements will not occur. Even though 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, however are not limited to changes in return rate between the Canadian Dollar and other currencies, changes in innovation, changes in the business climate, changes in the regulatory environment, the decline in the importance of the and new competitive pressures. The forward-looking statements contained in this press release are deliberately qualified by this cautionary statement.