MARKHAM, ONTARIO — (Marketwire) — 03/05/13 — Enghouse Systems Limited (TSX: ESL) today announced its unaudited first quarter financial results for the period ended January 31, 2013.
First quarter revenue was $42.0 million, an increase of 37% over revenue of $30.5 million in the first quarter last year. The increase in revenue was primarily the result of incremental revenue contributions from acquisitions. Revenue reflects hosted and maintenance services contributions of $20.6 million in the quarter, an increase of 29% over last year. Adjusted EBITDA for the quarter was $9.6 million or $0.36 per diluted share compared to $7.9 million or $0.30 per diluted share in last year-s first quarter. Results from operating activities for the quarter were $7.3 million compared to $7.6 million in the prior year-s first quarter as a result of special charges booked on acquisitions of $1.8 million in the quarter. Excluding special charges related to restructuring of acquisitions, results from operating activities would be $9.1 million, an increase of 20% over the prior year. Net income for the first quarter was $3.4 million or $0.13 per diluted share compared to the prior year-s first quarter net income of $4.1 million or $0.16 per share.
Operating expenses increased to $23.0 from $14.9 million in the prior year-s first quarter and include incremental operating costs related to acquisitions as well as special charges related to restructuring of acquired operations. Non-cash amortization charges in the quarter were $3.6 million and include amortization charges for acquired software and customer relationships from acquired operations.
Enghouse closed the quarter with $80.1 million in cash, cash equivalents and short-term investments, compared to $83.7 million at October 31, 2012. This reflects cash paid of nearly $10.0 million for the acquisitions of Visionutveckling AB and Albatross Scandinavia AB completed in the quarter. It also reflects a cash dividend paid of $1.7 million. The Company continues to have no long-term debt.
On March 1, 2013 the Company completed the acquisition of Locus Holdings AS (“Locus”) of Norway for a cash purchase price of approximately $14.0 million, subject to certain price adjustments. Locus is a leading supplier of fleet management solutions for the Public Safety and Transport & Logistics (including Security) sectors in the Scandinavian market and has a dominant position in the Norwegian Public Safety sector. Its products are installed in police cars, ambulances, rescue helicopters and fire brigades. Locus-s transportation, logistics and M2M products are also well established in these markets.
The Board of Directors also has approved a 23% increase in its eligible quarterly dividend to $0.08 per common share, payable on May 31, 2013 to shareholders of record at the close of business on May 17, 2013. Enghouse has increased its dividend in each of the past five years.
Enghouse remains committed to diversifying its revenue stream and accelerating its expansion into new markets and continues to seek further acquisitions to grow its market share.
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 .
Non-IFRS Measures
The Company uses non-IFRS measures to assess its operating performance. Securities regulations require that companies caution readers that earnings and other measures adjusted to a basis other than IFRS 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 results from operating activities and Adjusted EBITDA as a measure of operating performance. Therefore, results from operating activities and Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Results from operating activities are calculated as net income before amortization of acquired software and customer relationships, finance income, finance expenses, other income, and the provision for income taxes. Results from Adjusted EBITDA are calculated as net income before depreciation of property, plant and equipment, amortization of acquired software and customer relationships, finance income, finance expenses, other income, the provision of income tax and special charges for acquisition related restructuring and transaction costs. Management uses results from operating activities and Adjusted EBITDA to evaluate operating performance as they exclude 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.
The table below reconciles Adjusted EBITDA to net income:
Contacts:
Enghouse Systems Limited
Stephen Sadler
Chief Executive Officer
(905) 946-3236
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