Welcome!

News Feed Item

Enghouse Releases Second Quarter Results

MARKHAM, ONTARIO -- (Marketwired) -- 06/10/14 -- Enghouse Systems Limited (TSX:ESL) today announced its unaudited second quarter financial results for the period ended April 30, 2014.

Second quarter revenue was $55.0 million, an increase of 23% over revenue of $44.5 million in the second quarter last year. The increase in revenue reflects a combination of contributions from acquisitions, the positive impact of foreign exchange and organic growth. Revenue includes hosted and maintenance services contributions of $28.3 million in the quarter, an increase of 21% over last year. Adjusted EBITDA for the quarter was $13.9 million or $0.52 per diluted share compared to $10.7 million or $0.40 per diluted share in last year's second quarter. Results from operating activities for the quarter were $12.5 million compared to $9.7 million in the prior year's second quarter, an increase of 29% over the prior year. Net income for the quarter was $6.6 million or $0.24 per diluted share compared to the prior year's second quarter net income of $4.9 million or $0.19 per share.

On a year to date basis, revenue was $102.4 million for the year compared to $86.5 million last year, an increase of 18%, while net income was $12.7 million or $0.47 per diluted share compared to $8.3 million or $0.32 per diluted share, an increase of 53%. Adjusted EBITDA was $26.0 million or $0.97 per diluted share compared to $20.3 million or $0.77 per diluted share last year.

Operating expenses increased to $26.3 million from $22.3 million in the prior year's second quarter and include incremental operating costs related to acquisitions, foreign exchange and special charges of $0.8 million related to restructuring of acquired operations. Non-cash amortization charges in the quarter were $4.2 million compared to $3.9 million in the prior year's second quarter and include amortization charges for acquired software and customer relationships including acquisitions completed in the current year.

Enghouse closed the quarter with $101.0 million in cash, cash equivalents and short-term investments, compared to $90.3 million at October 31, 2013. This is after net cash paid of $8.2 million for the acquisition of IT Sonix AG, completed March 3, 2014, $1.8 million for Information Access Technology Inc., acquired November 4, 2013, final payments of $3.4 million made on previous acquisitions and dividends of $4.2 million paid year to date. The Company continues to have no long-term debt.

The Board of Directors has approved an eligible quarterly dividend of $0.10 per common share, payable on August 29, 2014 to shareholders of record at the close of business on August 15, 2014.

Enghouse remains committed to diversifying its revenue stream and continues to seek accretive acquisitions to grow its market share.

A conference call to discuss the results will be held on Wednesday, June 11, 2014 at 8:45 a.m. EST. To participate, please call 1-416-850-9144 or North American Toll-Free 1-866-400-3310. No PIN is required.

About Enghouse

Enghouse Systems Limited is a leading global provider of enterprise software solutions serving a variety of distinct vertical markets. Its strategy is to build a larger and more diverse software company through strategic acquisitions and managed growth. Enghouse shares are listed on the Toronto Stock Exchange under the symbol "ESL". Further information about Enghouse may be obtained from the Company's web site at www.enghouse.com.

Non-GAAP Measures

The Company uses non-GAAP measures to assess its operating performance. Securities regulations require that companies caution readers that earnings and other measures adjusted to a basis other than GAAP do not have standardized meanings and are unlikely to be comparable to similar measures used by other companies. Accordingly, they should not be considered in isolation. The Company uses Adjusted EBITDA as a measure of operating performance. Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Adjusted EBITDA is calculated as income before income taxes adjusted for depreciation of property, plant and equipment, amortization of acquired software and customer relationships, finance income, finance expenses, other income, and special charges for acquisition related restructuring costs. Management uses Adjusted EBITDA to evaluate operating performance as it excludes amortization of software and intangibles (which is an accounting allocation of the cost of software and intangible assets arising on acquisition), any impact of finance and tax related activities, asset depreciation, other income and restructuring costs primarily related to acquisitions.


Adjusted EBITDA

The table below reconciles Adjusted EBITDA to income before income taxes:

                               Three Months ended       Six Months ended    
                               April 30,   April 30,   April 30,   April 30,
                                    2014        2013        2014        2013
                                                                            
Total Revenue                   $ 54,951    $ 44,511   $ 102,443    $ 86,486
                                                                            
Income before income taxes         8,301       6,238      16,003      10,586
Depreciation of property,                                                   
 plant and equipment                 566         410       1,095         878
Amortization of acquired                                                    
 software and customer                                                      
 relationships                     4,231       3,876       8,141       7,460
Finance income                     (124)        (94)       (267)       (427)
Finance expenses                      75          96         133         177
Other income                         (1)       (448)         (8)       (809)
Special charges                      810         599         922       2,414
Adjusted EBITDA                 $ 13,858    $ 10,677    $ 26,019    $ 20,279
Adjusted EBITDA margin               25%         24%         25%         23%
Adjusted EBITDA per diluted                                                 
 share                            $ 0.52      $ 0.40      $ 0.97      $ 0.77


Enghouse Systems Limited 
Condensed Consolidated Interim Statements of Financial Position
(in thousands of Canadian dollars)
(Unaudited)

                                                       April 30, October 31,
                                                            2014        2013
                                                                            
                       Assets                                               
Current assets:                                                             
  Cash and cash equivalents                             $ 82,802    $ 70,109
  Short-term investments                                  18,212      20,188
  Accounts receivable, net                                44,454      36,444
  Prepaid expenses and other assets                        7,766       5,839
                                                    ------------------------
                                                         153,234     132,580
Non-current assets:                                                         
Property, plant and equipment                              3,944       3,599
Intangible assets                                        145,228     132,358
Deferred income tax assets                                 9,718       9,419
                                                    ------------------------
                                                                            
Total assets                                           $ 312,124   $ 277,956
                                                    ------------------------
                                                    ------------------------
                                                                            
                     Liabilities                                            
Current liabilities:                                                        
  Accounts payable and accrued liabilities              $ 31,956    $ 32,659
  Income taxes payable                                       506       1,555
  Dividends payable                                        2,613       2,083
  Accrued provisions                                       3,576       3,427
  Deferred revenue                                        50,992      39,325
                                                    ------------------------
                                                          89,643      79,049
Non-current liabilities:                                                    
Deferred income tax liabilities                           17,948      14,482
Deferred revenue                                           2,357       1,797
                                                    ------------------------
Total liabilities                                        109,948      95,328
                                                    ------------------------
                Shareholders' Equity                                        
                                                                            
Share capital                                             59,436      58,514
Contributed surplus                                        3,332       3,175
Retained earnings                                        123,830     115,800
Accumulated other comprehensive income                    15,578       5,139
                                                    ------------------------
Total shareholders' equity                               202,176     182,628
                                                    ------------------------
Total liabilities and shareholders' equity             $ 312,124   $ 277,956
                                                    ------------------------
                                                    ------------------------


Enghouse Systems Limited 
Condensed Consolidated Interim Statements of Operations and Comprehensive
 Income
(in thousands of Canadian dollars, except per share amounts)
(Unaudited) 

                            Three months ended April  Six months ended April
                                                  30                      30
                                    2014        2013        2014        2013
Revenue                                                                     
  Software licenses             $ 18,872    $ 13,624    $ 34,635    $ 28,688
  Hosted and maintenance                                                    
   services                       28,345      23,394      53,359      43,957
  Professional services            6,100       6,077      11,232      11,568
  Hardware                         1,634       1,416       3,217       2,255
                            ------------------------------------------------
                                  54,951      44,511     102,443      86,468
                            ------------------------------------------------
Direct costs                                                                
  Software licenses                1,684         649       2,884       2,078
  Services                        13,377      10,892      25,093      20,476
  Hardware                         1,078       1,004       2,097       1,597
                            ------------------------------------------------
                                  16,139      12,545      30,074      24,151
                            ------------------------------------------------
                                                                            
Revenue, net of direct costs      38,812      31,966      72,369      62,317
                                                                            
Operating expenses                                                          
  Selling, general and                                                      
   administrative                 15,514      13,517      28,190      26,923
  Research and development         9,440       7,772      18,160      15,115
  Depreciation of property,                                                 
   plant and equipment               566         410       1,095         878
  Special charges                    810         599         922       2,414
                            ------------------------------------------------
                                  26,330      22,298      48,367      45,330
                            ------------------------------------------------
                                                                            
Results from operating                                                      
 activities                       12,482       9,668      24,002      16,987
                                                                            
Amortization of acquired                                                    
 software and customer                                                      
 relationships                   (4,231)     (3,876)     (8,141)     (7,460)
Finance income                       124          94         267         427
Finance expenses                    (75)        (96)       (133)       (177)
Other income                           1         448           8         809
                            ------------------------------------------------
                                                                            
Income before income taxes         8,301       6,238      16,003      10,586
                                                                            
Provision for income taxes         1,743       1,335       3,273       2,248
                            ------------------------------------------------
                                                                            
Net income for the period        $ 6,558     $ 4,903    $ 12,730     $ 8,338
                            ------------------------------------------------
                            ------------------------------------------------
                                                                            
Items that are or may be                                                    
 reclassified subsequently                                                  
 to profit or loss:                                                         
----------------------------                                                
Foreign currency translation                                                
 differences from foreign                                                   
 operations                          751       (478)      10,521         383
Transfer to net income of                                                   
 realized gains on available                                                
 for sale investments               (17)       (443)        (37)       (868)
Unrealized (loss) gain on                                                   
 available for sale                                                         
 investments                        (40)         210        (57)       1,097
Deferred income tax recovery                                                
 (expense)                             7          30          12       (122)
                            ------------------------------------------------
                                                                            
Other comprehensive income                                                  
 (loss)                              701       (681)      10,439         490
                            ------------------------------------------------
                                                                            
Comprehensive income             $ 7,259     $ 4,222    $ 23,169     $ 8,828
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Earnings per share                                                          
Basic                             $ 0.25      $ 0.19      $ 0.49      $ 0.32
Diluted                           $ 0.24      $ 0.19      $ 0.47      $ 0.32
----------------------------------------------------------------------------


Enghouse Systems Limited 
Condensed Consolidated Interim Statements of Changes in Equity 
(in thousands of Canadian dollars)
(Unaudited)

                                                 Accumu-                    
                                                   lated                    
                                                   other                    
                                                 compre-                    
                                        Contri-  hensive                    
                         Share    Share   buted   income  Retained          
                       Capital  capital surplus   (loss)  earnings     Total
                       -number        $       $        $         $         $
                                                                            
Balance - November                                                          
 1, 2013            26,042,962   58,514   3,175    5,139   115,800   182,628
                                                                            
Net income                   -        -       -        -    12,730    12,730
Other Comprehensive                                                         
 Income:                                                                    
Cumulative                                                                  
 Translation                                                                
 Adjustment                  -        -       -   10,521         -    10,521
Transfer to net                                                             
 income of realized                                                         
 gains on                                                                   
 available-for-sale                                                         
 investments                 -        -       -     (37)         -      (37)
Unrealized loss on                                                          
 available-for-sale                                                         
 investments                 -        -       -     (57)         -      (57)
Deferred income tax                                                         
 recovery                    -        -       -       12         -        12
                   ---------------------------------------------------------
Comprehensive                                                               
 income for the                                                             
 period                      -        -       -   10,439    12,730    23,169
                   ---------------------------------------------------------
                   ---------------------------------------------------------
Employee share                                                              
 options:                                                                   
  Value of services                                                         
   recognized                -        -     364        -         -       364
  Proceeds on                                                               
   issuing shares       83,500      922   (207)        -         -       715
Dividends                    -        -       -        -   (4,700)   (4,700)
                   ---------------------------------------------------------
Balance - April 30,                                                         
 2014               26,126,462   59,436   3,332   15,578   123,830   202,176
                   ---------------------------------------------------------
                   ---------------------------------------------------------
                                                                            
                                                                            
Balance - November                                                          
 1, 2012            25,780,562   55,751   2,847     (29)    99,371   157,940
                                                                            
Net income                   -        -       -        -     8,338     8,338
Other Comprehensive                                                         
 Income:                                                                    
Cumulative                                                                  
 Translation                                                                
 Adjustment                  -        -       -      383         -       383
Transfer to net                                                             
 income of realized                                                         
 gains on                                                                   
 available-for-sale                                                         
 investments                 -        -       -    (868)         -     (868)
Unrealized gain on                                                          
 available-for-sale                                                         
 investments                 -        -       -    1,097         -     1,097
Deferred income tax                                                         
 expense                     -        -       -    (122)         -     (122)
                   ---------------------------------------------------------
Comprehensive                                                               
 income for the                                                             
 period                      -        -       -      490     8,338     8,828
                   ---------------------------------------------------------
                   ---------------------------------------------------------
Employee share                                                              
 options:                                                                   
  Value of services                                                         
   recognized                -        -     423        -         -       423
  Proceeds on                                                               
   issuing shares      172,400    1,864   (489)        -         -     1,375
 Dividends                   -        -       -        -   (3,756)   (3,756)
                   ---------------------------------------------------------
Balance - April 30,                                                         
 2013               25,952,962   57,615   2,781      461   103,953   164,810
                   ---------------------------------------------------------
                   ---------------------------------------------------------


Enghouse Systems Limited
Condensed Consolidated Interim Statements of Cash Flows
(in thousands of Canadian dollars)
(Unaudited)

                            Three months ended April  Six months ended April
                                                  30                      30
                                    2014        2013        2014        2013
Cash flows from operating                                                   
 activities                                                                 
Net income                       $ 6,558     $ 4,903    $ 12,730     $ 8,338
                                                                            
Adjustments for:                                                            
  Depreciation of property,                                                 
   plant and equipment               566         410       1,095         878
  Amortization of acquired                                                  
   software and customer                                                    
   relationships                   4,231       3,876       8,141       7,460
  Stock-based compensation                                                  
   expense                           205         286         364         423
  Income tax expense               1,743       1,335       3,273       2,248
  Finance expenses and other                                                
   income                             74       (352)         125       (632)
                            ------------------------------------------------
                                  13,377      10,458      25,728      18,715
                                                                            
Changes in non-cash                                                         
 operating working capital         2,874       (544)       1,214       (473)
  Income tax paid                (2,385)       (601)     (3,172)     (2,786)
----------------------------------------------------------------------------
Net cash flows from                                                         
 operating activities             13,866       9,313      23,770      15,456
                                                                            
Cash flows from investing                                                   
 activities                                                                 
Purchase of property, plant                                                 
 and equipment, net                (131)       (677)       (788)       (971)
Acquisitions, net of cash                                                   
 acquired of $969 ($3,617 -                                                 
 2013)                           (8,282)     (6,846)    (10,060)    (16,831)
Purchase consideration for                                                  
 prior period acquisitions       (3,040)           -     (3,422)           -
Net sale of short-term                                                      
 investments                       4,861       8,831       3,246       4,803
----------------------------------------------------------------------------
Net cash flows used in                                                      
 investing activities            (6,592)       1,308    (11,024)    (12,999)
                                                                            
Cash flows from financing                                                   
 activities                                                                 
Issuance of share capital            354         850         715       1,375
Payment of cash dividend         (2,087)     (1,680)     (4,170)     (3,356)
----------------------------------------------------------------------------
Net cash flows used in                                                      
 financing activities            (1,733)       (830)     (3,455)     (1,981)
                                                                            
                                                                            
Effect of currency                                                          
 translation adjustments on                                                 
 cash and cash equivalents           264       (267)       3,402          39
----------------------------------------------------------------------------
                                                                            
Net increase in cash and                                                    
 cash equivalents during the                                                
 period                            5,805       9,524      12,693         515
Cash and cash equivalents-                                                  
 beginning of period              76,997      50,535      70,109      59,544
                                                                            
Cash and cash equivalents -                                                 
 end of period                  $ 82,802    $ 60,059    $ 82,802    $ 60,059
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Enghouse Systems Limited
Selected Segment Reporting Information
(in thousands of Canadian dollars)
(Unaudited)

                              For the three months                          
                                      ended         For the six months ended
                                    April 30                April 30        
                            ------------------------------------------------
                                                                            
                                    2014        2013        2014        2013
                            ------------------------------------------------
                                                                            
Revenue:                                                                    
  Asset Management Group        $ 11,054     $ 8,243    $ 20,746    $ 13,489
  Interactive Management                                                    
   Group                          43,897      36,268      81,697      72,979
                            ------------------------------------------------
Total                           $ 54,951    $ 44,511   $ 102,443    $ 86,468
                            ------------------------------------------------
                            ------------------------------------------------
                                                                            
                                                                            
Segment Profit:                                                             
  Asset Management Group         $ 2,748       $ 747     $ 4,955     $ 1,856
  Interactive Management                                                    
   Group                          11,100       9,963      21,705      17,039
  Corporate expenses             (1,366)     (1,042)     (2,658)     (1,908)
  Amortization of acquired                                                  
   software and customer                                                    
   relationships                 (4,231)     (3,876)     (8,141)     (7,460)
  Finance income                     124          94         267         427
  Finance expenses                  (75)        (96)       (133)       (177)
  Other income                         1         448           8         809
                            ------------------------------------------------
                            ------------------------------------------------
Total                            $ 8,301     $ 6,238    $ 16,003    $ 10,586
                            ------------------------------------------------
                            ------------------------------------------------

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
Your business relies on your applications and your employees to stay in business. Whether you develop apps or manage business critical apps that help fuel your business, what happens when users experience sluggish performance? You and all technical teams across the organization – application, network, operations, among others, as well as, those outside the organization, like ISPs and third-party providers – are called in to solve the problem.
Most of us already know that adopting new cloud applications can boost a business’s productivity by enabling organizations to be more agile and ready to change course in our fast-moving and connected digital world. But the rapid adoption of cloud apps and services also brings with it profound security threats, including visibility and control challenges that aren’t present in traditional on-premises environments. At the same time, the cloud – because of its interconnected, flexible and adaptable...
An IoT product’s log files speak volumes about what’s happening with your products in the field, pinpointing current and potential issues, and enabling you to predict failures and save millions of dollars in inventory. But until recently, no one knew how to listen. In his session at @ThingsExpo, Dan Gettens, Chief Research Officer at OnProcess, will discuss recent research by Massachusetts Institute of Technology and OnProcess Technology, where MIT created a new, breakthrough analytics model f...
Digital transformation is too big and important for our future success to not understand the rules that apply to it. The first three rules for winning in this age of hyper-digital transformation are: Advantages in speed, analytics and operational tempos must be captured by implementing an optimized information logistics system (OILS) Real-time operational tempos (IT, people and business processes) must be achieved Businesses that can "analyze data and act and with speed" will dominate those t...
SYS-CON Events announced today that Roundee / LinearHub will exhibit at the WebRTC Summit at @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LinearHub provides Roundee Service, a smart platform for enterprise video conferencing with enhanced features such as automatic recording and transcription service. Slack users can integrate Roundee to their team via Slack’s App Directory, and '/roundee' command lets your video conference ...
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
There is growing need for data-driven applications and the need for digital platforms to build these apps. In his session at 19th Cloud Expo, Muddu Sudhakar, VP and GM of Security & IoT at Splunk, will cover different PaaS solutions and Big Data platforms that are available to build applications. In addition, AI and machine learning are creating new requirements that developers need in the building of next-gen apps. The next-generation digital platforms have some of the past platform needs a...
Without a clear strategy for cost control and an architecture designed with cloud services in mind, costs and operational performance can quickly get out of control. To avoid multiple architectural redesigns requires extensive thought and planning. Boundary (now part of BMC) launched a new public-facing multi-tenant high resolution monitoring service on Amazon AWS two years ago, facing challenges and learning best practices in the early days of the new service. In his session at 19th Cloud Exp...
SYS-CON Events announced today that Secure Channels will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The bedrock of Secure Channels Technology is a uniquely modified and enhanced process based on superencipherment. Superencipherment is the process of encrypting an already encrypted message one or more times, either using the same or a different algorithm.
While DevOps promises a better and tighter integration among an organization’s development and operation teams and transforms an application life cycle into a continual deployment, Chef and Azure together provides a speedy, cost-effective and highly scalable vehicle for realizing the business values of this transformation. In his session at @DevOpsSummit at 19th Cloud Expo, Yung Chou, a Technology Evangelist at Microsoft, will present a unique opportunity to witness how Chef and Azure work tog...
Almost two-thirds of companies either have or soon will have IoT as the backbone of their business in 2016. However, IoT is far more complex than most firms expected. How can you not get trapped in the pitfalls? In his session at @ThingsExpo, Tony Shan, a renowned visionary and thought leader, will introduce a holistic method of IoTification, which is the process of IoTifying the existing technology and business models to adopt and leverage IoT. He will drill down to the components in this fra...
SYS-CON Events announced today that Numerex Corp, a leading provider of managed enterprise solutions enabling the Internet of Things (IoT), will exhibit at the 19th International Cloud Expo | @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Numerex Corp. (NASDAQ:NMRX) is a leading provider of managed enterprise solutions enabling the Internet of Things (IoT). The Company's solutions produce new revenue streams or create operating...
IoT is fundamentally transforming the auto industry, turning the vehicle into a hub for connected services, including safety, infotainment and usage-based insurance. Auto manufacturers – and businesses across all verticals – have built an entire ecosystem around the Connected Car, creating new customer touch points and revenue streams. In his session at @ThingsExpo, Macario Namie, Head of IoT Strategy at Cisco Jasper, will share real-world examples of how IoT transforms the car from a static p...
I'm a lonely sensor. I spend all day telling the world how I'm feeling, but none of the other sensors seem to care. I want to be connected. I want to build relationships with other sensors to be more useful for my human. I want my human to understand that when my friends next door are too hot for a while, I'll soon be flaming. And when all my friends go outside without me, I may be left behind. Don't just log my data; use the relationship graph. In his session at @ThingsExpo, Ryan Boyd, Engi...