Enghouse Releases Second Quarter Results

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Enghouse Systems Limited (TSX:ENGH) has announced its
second quarter (unaudited) financial results for the period ended April 30, 2017.
Second quarter revenue was $79.5 million, an increase of 1.3% over revenue of $78.5 million in the second
quarter last year. On a year to date basis, revenue was $158.4 million compared to $152.9 million last
year, an increase of 3.6%. The revenue increase primarily reflects incremental revenue contributions from
acquisitions but is mitigated by the unfavorable impact of foreign exchange compared to last year which
negatively impacted revenue by an estimated $3.3 million in the quarter and $8.0 million year to date.
Hosted and maintenance services revenue was $39.9 million in the quarter, an increase of 4.2% over the
same period last year and includes the estimated negative impact of foreign exchange of $1.65 million.
Adjusted EBITDA for the quarter was $20.5 million ($0.75 per diluted share) compared to $19.3 million
($0.71 per diluted share) in last year’s second quarter and includes the net negative impact of $2.1 million
related to foreign exchange losses compared to last year. Adjusted EBITDA for the year to date was $43.6
million ($1.60 per diluted share) compared to $38.4 million ($1.41 per diluted share) last year, an increase
of 13.6%. This includes the net negative impact of $4.4 million related to foreign exchange losses on a
year to date basis compared to last year, which would have resulted in a 26.7% increase compared to the
prior year excluding foreign exchange losses.
Net income for the quarter was $9.0 million ($0.33 per diluted share) compared to the prior year’s second
quarter net income of $8.5 million ($0.31 per diluted share). Results from operating activities for the quarter
were $19.5 million compared to $18.1 million in the prior year’s second quarter, an increase of 7.5% over
the prior year.
Operating expenses before special charges related to restructuring of acquired operations were $35.0
million compared to $35.2 million in the prior year’s second quarter and include incremental operating
costs related to acquired operations, net of the favourable impact of foreign exchange. Non-cash
amortization charges in the quarter were $7.5 million compared to $7.0 million in the prior year’s second
quarter and include amortization charges for acquired software and customer relationships from acquired
operations. On a year to date basis operating expenses before special charges were $65.9 million
compared to $67.6 million and include incremental operating costs related to acquired operations, net of
the favourable impact of foreign exchange compared to last year.
Enghouse generated cash flows from operations of $18.4 million in the quarter and closed the quarter with
$87.6 million in cash, cash equivalents and short-term investments, compared to $85.9 million at October
31, 2016. The cash balance was achieved after year-to-date payments comprised of $16.2 million (net of
cash acquired and holdbacks) for Tollgrade Communications Inc. (acquired April 12, 2017), $1.7 million
to partially settle loans inherited from the Presence Technology, S.L. acquisition (completed October 28,
2016), $0.4 million for prior period acquisitions, and $7.5 million in dividends paid.
The Board of Directors has approved an eligible quarterly dividend of $0.16 per common share, payable
on August 31, 2017 to shareholders of record at the close of business on August 17, 2017.
Enghouse remains committed to its acquisition strategy and continues to seek accretive acquisitions.
A conference call to discuss the results will be held on Friday June 9, 2017 at 8:45 a.m. EST. To
participate, please call +1-416-640-5946 or North American Toll-Free +1-866-233-4606. No PIN is
required.

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