STC Sangoma Technologies Corporation

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 fourth
quarter financial results, audited consolidated financial statements for the
full year of fiscal 2013, ended June 30, 2013 and preliminary revenues for the
first quarter of fiscal 2014 ended September 30, 2013.


As previously announced sales for the fourth quarter were a record $4.0 million,
an increase of 8% over the same quarter last year and 25% over the immediately
preceding third quarter of fiscal 2013.


"I am most pleased that we closed the year with a very positive revenue quarter,
indicating that the strategy of introducing new products to the portfolio
continues to gain traction, with over 40% of revenue coming from products
introduced in the last two years," said Bill Wignall, President and CEO of
Sangoma. "Our company has wanted to break through the $4 million quarterly
revenue threshold for some time, and it's excellent to see Sangoma finally
achieve that milestone. Further, it was encouraging to see that level of revenue
drive operating income up to about $0.42 million for the fourth quarter. The
major challenges identified at Sangoma over two years ago were to rebuild
Sangoma's organization, product line and target customers. It remains early in
this process and the gradual decline in PSTN-based products presents a real
strain to all companies who sell into that category, something we have seen
clearly in fiscal 2013. This decline in the Company's legacy product sales,
along with recent prices for Sangoma shares, has unfortunately required us to
take a non-cash impairment charge of $4.6 million in the fourth quarter. As
indicated after our third quarter, we saw an opportunity to tighten both expense
and cash management, with much of the major product 'catch-up' now complete.
Accordingly, we undertook a modest restructuring in June to reduce our spending
and have closed the year with over $4 million in cash. Looking back on 2013
overall, I'm encouraged by the uptake of new products introduced in the last
12-24 months and I would like to thank our customers for their faith in Sangoma,
and our employees as well as investors for their support during this transition
period in Sangoma's history."




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                         Q4 FY2013 Q4 FY2012 Change   FY2013   FY2012 Change
                                                                            
Sales                      $4.00 m   $3.71 m     8% $12.95 m $13.76 m   (6%)
Gross profit               $2.46 m   $2.36 m     4%  $8.48 m  $9.47 m  (10%)
Operating Expense          $2.04 m   $2.40 m  (15%)  $8.54 m  $8.41 m     2%
Operating Income (Loss)                                                     
 before undernoted(1)      $0.42 m  -$0.04 m        -$0.06 m  $1.05 m       
Net income (loss)         -$3.95 m  -$0.31 m        -$4.33 m  $0.41 m       
Net earnings per share                                                      
 (fully diluted)          $(0.136)  $(0.010)        $(0.148)   $0.014       
EBITDA(1)                  $0.55 m   $0.09 m         $0.43 m  $1.58 m       
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(1) Operating Income (Loss) before undernoted and EBITDA are metrics used by
the Company to monitor its performance and the definitions may be found in  
the accompanying Financial Statements and MD&A posted at www.sedar.com.     



Annual sales for the full year of fiscal 2013 were $13.0 million, a decrease of
6% compared to full year fiscal 2012. 


Gross profit was $2.46 million for the quarter and $8.48 million for the year,
or 62% and 66% of revenue, respectively. Gross margin as a percent of revenue in
fiscal 2013 has been slightly lower than in prior years as Sangoma's expanded
product portfolio has a lower average margin than that of its traditional
board-based business. 


Operating expense for the fourth quarter was $2.04 million and for the year was
$8.54 million before one-time impacts. Annual operating expenses were flat
compared to the prior fiscal year, coming in about 2% lower before the impact of
foreign exchange movements. The company undertook a modest restructuring in June
to better align expenses to revenue, a change that is expected to reduce cash
spending by about $0.8 million per year. 


Operating income before undernoted in the fourth quarter was $0.42 million, up
from a loss in the same period last year, and for the fiscal year was a $0.06
million loss compared to income of $1.05 million for fiscal year 2012. The
decline in operating income for the year was driven by the lower revenue and
margin.


In the fourth quarter ended June 30, 2013 we recorded a provision of $0.20
million to cover the costs associated with redundancy payments and other
one-time charges that would be paid out in fiscal 2014. In addition, under IFRS
the Company conducts a quarterly impairment assessment. The June 30, 2013
assessment identified a need to take a non-cash charge of $4.6 million against
goodwill and intangible assets. 


Net loss for the year ended June 30, 2013 was $4.33 million (-$0.148 per share
fully diluted), compared to a net income of $0.41million ($0.014 per share fully
diluted) for the year ended June 30, 2012. 


Sangoma finished the year with a cash balance of $4.01 million and had working
capital of $10.71 million on June 30, 2013, as compared to $5.02 million and
$11.38 million on June 30, 2012, respectively. 


The timing of the annual results release this year has given us the opportunity
to announce preliminary revenues of $2.7 million for the first quarter of fiscal
2014 ended September 30, 2013. The first quarter showed continued weakness in
PSTN-based products and this has already been factored in to the impairment
assessment.


President and CEO, Bill Wignall, and CFO, David Moore will host a conference
call on Monday, October 28, 2013 at 2:00 pm 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. 


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.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Sangoma Technologies Corporation
David Moore
Chief Financial Officer
(905) 474-1990 Ext. 107
dsmoore@sangoma.com
www.sangoma.com

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