MARKHAM, ON, March 3, 2022 /CNW/ - Enghouse Systems Limited
(TSX:ENGH) today announced its first quarter unaudited financial
results for the period ended January
31, 2022. All the financial information is in Canadian
dollars unless otherwise indicated.
Financial and operational highlights for the three months ended
January 31, 2022 compared to the
three months ended January 31, 2021
are as follows:
- Revenue achieved was $111.1 million compared to revenue of
$119.1 million;
- Results from operating activities was $35.7 million compared to $40.7 million;
- Net income increased to $21.6 million compared to $20.6 million;
- Adjusted EBITDA was $38.6 million compared to $44.5 million;
- Cash flows from operating activities excluding changes in
working capital was $38.7 million compared to $41.7 million.
Revenue for the first quarter of 2022 was $111.1 million compared to revenue of
$119.1 million in the prior
year. While revenue for the first quarter of the comparative year
had mostly returned to pre-COVID volumes it represents the tail-end
of a period positively impacted by an influx of COVID related
demand for our remote-work and visual computing solutions. Revenue
for the quarter was also negatively impacted by $4.4 million as a result of foreign exchange
compared to the prior year. We also continue to experience a shift
towards cloud offerings, particularly in the contact center
market.
Net income for the quarter was $21.6
million or $0.39 per diluted
share, compared to $20.6 million or
$0.37 per diluted share last year.
The increase in Net income is a result of lower costs and higher
other income despite lower revenues relative to the comparative
period. Adjusted EBITDA was $38.6
million or $0.69 per diluted
share, compared to $44.5 million or
$0.80 per diluted share in the first
quarter of 2021.
Enghouse closed the quarter with $214.8
million in cash, cash equivalents and short-term
investments, compared to $198.8
million at October 31, 2021
with no external debt. The cash balance was achieved after making
payments of $8.9 million for
dividends in the first quarter. Enghouse remains focused on its
long-term growth strategy, investing in products while ensuring
profitability and maximizing operating cashflows. As a result,
Enghouse continues to replenish its acquisition capital while
annually increasing its eligible quarterly dividend.
Quarterly dividends:
Today, the Board of
Directors approved the Company's eligible quarterly dividend of
$0.185 per common share, an increase
of 16% over the prior dividend, payable on May 31, 2022 to shareholders of record at
the close of business on May 17,
2022. This represents the 14th consecutive year
in which the company increased its dividend by over 10%.
Enghouse Systems Limited
Financial
Highlights
(unaudited, in thousands of Canadian
dollars)
|
For the period
ended January 31
|
|
|
Three
months
|
|
|
|
|
|
|
|
|
2022
|
|
2021
|
Var
($)
|
Var
(%)
|
|
Revenue
|
|
|
|
|
|
|
|
$
|
111,102
|
$
|
119,100
|
(7,998)
|
(6.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
costs
|
|
|
|
|
|
|
|
|
32,828
|
|
31,508
|
1,320
|
4.2
|
|
Revenue, net of
direct costs
|
|
|
|
|
|
|
|
$
|
78,274
|
$
|
87,592
|
(9,318)
|
(10.6)
|
|
As a % of
revenue
|
|
|
|
|
|
|
|
|
70.5%
|
|
73.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
42,551
|
|
46,510
|
(3,959)
|
(8.5)
|
|
Special
charges
|
|
|
|
|
|
|
|
|
18
|
|
383
|
(365)
|
(95.3)
|
|
Results from
operating activities
|
|
|
|
|
|
|
|
$
|
35,705
|
$
|
40,699
|
(4,994)
|
(12.3)
|
|
As a % of
revenue
|
|
|
|
|
|
|
|
|
32.1%
|
|
34.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquired software and customer relationships
|
|
|
|
|
|
|
|
|
(9,657)
|
|
(10,774)
|
1,117
|
10.4
|
|
Foreign exchange
losses
|
|
|
|
|
|
|
|
|
(336)
|
|
(3,110)
|
2,774
|
89.2
|
|
Interest expense –
lease obligations
|
|
|
|
|
|
|
|
|
(202)
|
|
(329)
|
127
|
38.6
|
|
Finance
income
|
|
|
|
|
|
|
|
|
129
|
|
80
|
49
|
61.3
|
|
Finance
expenses
|
|
|
|
|
|
|
|
|
(23)
|
|
(81)
|
58
|
71.6
|
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
1,000
|
|
(324)
|
1,324
|
408.6
|
|
Income before
income taxes
|
|
|
|
|
|
|
|
$
|
26,616
|
$
|
26,161
|
455
|
1.7
|
|
Provision for income
taxes
|
|
|
|
|
|
|
|
|
5,019
|
|
5,519
|
(500)
|
(9.1)
|
|
Net Income for the
period
|
|
|
|
|
|
|
|
$
|
21,597
|
$
|
20,642
|
955
|
4.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
|
|
|
|
|
|
|
0.39
|
|
0.37
|
0.02
|
5.4
|
|
Diluted earnings per
share
|
|
|
|
|
|
|
|
|
0.39
|
|
0.37
|
0.02
|
5.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash
flows
|
|
|
|
|
|
|
|
|
24,342
|
|
20,545
|
3,797
|
18.5
|
|
Operating cash flows
excluding changes in working capital
|
|
|
|
|
|
|
|
|
38,743
|
|
41,715
|
(2,972)
|
(7.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Results from
operating activities
|
|
|
|
|
|
|
|
|
35,705
|
|
40,699
|
(4,994)
|
(12.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
720
|
|
735
|
(15)
|
2.0
|
|
Depreciation of
right-of-use assets
|
|
|
|
|
|
|
|
|
2,112
|
|
2,703
|
(591)
|
21.9
|
|
Special
charges
|
|
|
|
|
|
|
|
|
18
|
|
383
|
(365)
|
95.3
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
$
|
38,555
|
$
|
44,520
|
(5,965)
|
(13.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
|
|
|
|
|
|
|
34.7%
|
|
37.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
per diluted share
|
|
|
|
|
|
|
|
$
|
0.69
|
$
|
0.80
|
( 0.11)
|
(13.8)
|
|
Condensed
Consolidated Interim Statements of Financial
Position
|
|
(in thousands of
Canadian dollars)
(unaudited)
|
|
As at
January 31,
2021
|
As at October
31,
2021
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
|
210,899
|
$
|
195,890
|
|
Short-term investments
|
|
|
3,915
|
|
2,944
|
|
Accounts
receivable
|
|
|
108,927
|
|
89,374
|
|
Prepaid
expenses and other assets
|
|
|
13,669
|
|
13,322
|
|
Income
taxes recoverable
|
|
|
-
|
|
2,130
|
|
|
|
337,410
|
|
303,660
|
|
Non-current
assets:
|
|
|
|
|
|
|
Property
and equipment
|
|
|
5,090
|
|
6,246
|
|
Right-of-use assets
|
|
|
24,153
|
|
25,943
|
|
Intangible assets
|
|
|
93,038
|
|
101,822
|
|
Goodwill
|
|
|
223,194
|
|
223,021
|
|
Deferred
income tax assets
|
|
|
16,399
|
|
13,932
|
|
|
|
361,874
|
|
370,964
|
|
|
$
|
699,284
|
$
|
674,624
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
$
|
61,690
|
$
|
71,506
|
|
Income
taxes payable
|
|
|
1,373
|
|
-
|
|
Dividends payable
|
|
|
8,889
|
|
8,889
|
|
Provisions
|
|
|
3,933
|
|
5,588
|
|
Deferred
revenue
|
|
|
100,222
|
|
80,614
|
|
Lease
obligations
|
|
|
8,130
|
|
7,941
|
|
|
|
184,237
|
|
174,538
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
Income
taxes payable
|
|
|
2,325
|
|
2,949
|
|
Deferred
income tax liabilities
|
|
|
14,046
|
|
13,392
|
|
Deferred
revenue
|
|
|
8,574
|
|
9,111
|
|
Net
employee defined benefit obligation
|
|
|
2,655
|
|
2,663
|
|
Lease
obligations
|
|
|
15,889
|
|
17,660
|
|
|
|
43,489
|
|
45,775
|
|
|
|
227,726
|
|
220,313
|
|
Shareholders'
equity
|
|
|
|
|
|
|
Share
capital
|
|
|
106,470
|
|
106,470
|
|
Contributed surplus
|
|
|
7,819
|
|
7,406
|
|
Retained
earnings
|
|
|
367,727
|
|
355,019
|
|
Accumulated other comprehensive loss
|
|
|
(10,458)
|
|
(14,584)
|
|
|
|
471,558
|
|
454,311
|
|
|
$
|
699,284
|
$
|
674,624
|
|
Condensed
Consolidated Interim Statements of Operations and Comprehensive
Income
|
|
(in thousands of
Canadian dollars, except per share amounts)
|
|
(unaudited)
|
|
|
Three
months
|
|
Periods ended
January 31
|
|
|
|
2022
|
2021
|
|
|
|
|
|
|
|
Revenue
Software licenses
|
|
|
|
$
|
23,778
|
$
|
28,300
|
|
Hosted and maintenance
services
|
|
|
|
66,427
|
72,243
|
|
Professional
services
|
|
|
|
17,952
|
15,829
|
|
Hardware
|
|
|
|
2,945
|
2,728
|
|
|
|
|
111,102
|
119,100
|
|
Direct
costs
|
|
|
|
|
|
|
Software licenses
|
|
|
|
1,327
|
1,201
|
|
Services
|
|
|
|
29,594
|
28,472
|
|
Hardware
|
|
|
|
1,907
|
1,835
|
|
|
|
|
32,828
|
31,508
|
|
Revenue, net of
direct costs
|
|
|
|
78,274
|
87,592
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
|
|
22,407
|
22,951
|
|
Research and
development
|
|
|
|
17,312
|
20,121
|
|
Depreciation
|
|
|
|
720
|
735
|
|
Depreciation of right-of-use
assets
|
|
|
|
2,112
|
2,703
|
|
Special charges
|
|
|
|
18
|
383
|
|
|
|
|
42,569
|
46,893
|
|
|
|
|
|
|
|
Results from
operating activities
|
|
|
|
35,705
|
40,699
|
|
|
|
|
|
|
|
Amortization of
acquired software and customer
relationships
|
|
|
|
(9,657)
|
(10,774)
|
|
Foreign exchange
losses
|
|
|
|
(336)
|
(3,110)
|
|
Interest expense –
lease obligations
|
|
|
|
(202)
|
(329)
|
|
Finance
income
|
|
|
|
129
|
80
|
|
Finance
expenses
|
|
|
|
(23)
|
(81)
|
|
Other income
(expenses)
|
|
|
|
1,000
|
( 324)
|
|
Income before
income taxes
|
|
|
|
26,616
|
26,161
|
|
|
|
|
|
|
|
Provision for
income taxes
|
|
|
|
5,019
|
5,519
|
|
|
|
|
|
|
Net income for the
period
|
|
|
|
$
|
21,597
|
$
|
20,642
|
|
Items that may be
subsequently reclassified to income:
|
|
|
|
|
|
Cumulative
translation adjustment
|
|
|
|
4,126
|
(4,868)
|
|
|
|
|
|
|
|
Other
comprehensive income (loss)
|
|
|
|
4,126
|
(4,868)
|
|
|
|
|
|
|
|
Comprehensive
income
|
|
|
|
$
|
25,723
|
$
|
15,774
|
|
Earnings per
share
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
0.39
|
$
|
0.37
|
|
Diluted
|
|
|
|
$
|
0.39
|
$
|
0.37
|
|
Condensed
Consolidated Interim Statements of Cash Flows
|
|
(in thousands of
Canadian dollars)
(unaudited)
|
|
|
Three
months
|
|
Periods ended
January 31
|
|
|
|
2022
|
2021
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
Net income for the
period
|
|
|
|
$
|
21,597
|
$
|
20,642
|
|
Adjustments for
non-cash items
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
720
|
735
|
|
Depreciation of right-of-use assets
|
|
|
|
2,112
|
2,703
|
|
Interest
expense – lease obligations
|
|
|
|
202
|
329
|
|
Amortization of acquired software and customer
relationships
|
|
|
|
9,657
|
10,774
|
|
Stock-based compensation expense
|
|
|
|
413
|
608
|
|
Provision for income taxes
|
|
|
|
5,019
|
5,519
|
|
Finance
and other (expenses) income
|
|
|
|
(977)
|
405
|
|
|
|
|
38,743
|
41,715
|
|
|
|
|
|
|
|
Changes in non-cash
operating working capital
|
|
|
|
(11,202)
|
(11,355)
|
|
Income taxes
paid
|
|
|
|
(3,199)
|
(9,815)
|
|
Net cash provided
by operating activities
|
|
|
|
24,342
|
20,545
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
Sale (purchase) of
property and equipment
|
|
|
|
235
|
(678)
|
|
Acquisitions, net of
cash acquired*
|
|
|
|
-
|
(27,829)
|
|
Sale of short-term
investments
|
|
|
|
-
|
2,546
|
|
Net cash provided
by (used in) investing activities
|
|
|
|
235
|
(25,961)
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
Issuance of share
capital
|
|
|
|
-
|
154
|
|
Repayment of lease
obligations
|
|
|
|
(2,093)
|
(2,830)
|
|
Dividends
paid
|
|
|
|
(8,889)
|
(7,472)
|
|
Net cash used in
financing activities
|
|
|
|
(10,982)
|
(10,148)
|
|
Impact of foreign
exchange on cash and cash equivalents
|
|
|
|
1,414
|
(3,251)
|
|
|
|
|
|
|
|
Increase
(decrease) in cash and cash equivalents
|
|
|
|
15,009
|
(18,815)
|
|
Cash and cash
equivalents - beginning of period
|
|
|
|
195,890
|
244,792
|
|
Cash and cash
equivalents - end of period
|
|
|
|
$
|
210,899
|
$
|
225,977
|
|
|
* Acquisitions are
net of cash acquired of nil and $1,463 for the three months ended
January 31, 2022 and 2021, respectively.
|
Enghouse Systems Limited
Segment Reporting
Information
(in thousands of Canadian dollars)
|
Three months ended
January 31, 2022
|
IMG
|
AMG
|
Total
|
|
Revenue
|
$
|
61,871
|
$
|
49,231
|
$
|
111,102
|
|
Direct
costs
|
|
(15,444)
|
|
(17,384)
|
|
(32,828)
|
|
Revenue, net of
direct costs
|
|
46,427
|
|
31,847
|
|
78,274
|
|
Operating expenses
excluding special charges
|
|
(19,551)
|
|
(11,172)
|
|
(30,723)
|
|
Depreciation
|
|
(596)
|
|
(124)
|
|
(720)
|
|
Depreciation of
right-of-use assets
|
|
(1,327)
|
|
(785)
|
|
(2,112)
|
|
Segment
profit
|
$
|
24,953
|
$
|
19,766
|
$
|
44,719
|
|
Special
charges
|
|
|
|
|
|
(18)
|
|
Corporate and shared
service expenses
|
|
|
|
|
|
(8,996)
|
|
Results from
operating activities
|
|
|
|
|
$
|
35,705
|
|
|
|
|
|
|
|
|
|
Three months ended
January 31, 2021
|
IMG
|
AMG
|
Total
|
|
Revenue
|
$
|
70,303
|
$
|
48,797
|
$
|
119,100
|
|
Direct
costs
|
|
(15,457)
|
|
(16,051)
|
|
(31,508)
|
|
Revenue, net of
direct costs
|
|
54,846
|
|
32,746
|
|
87,592
|
|
Operating expenses
excluding special charges
|
|
(22,663)
|
|
(12,125)
|
|
(34,788)
|
|
Depreciation
|
|
(671)
|
|
(64)
|
|
(735)
|
|
Depreciation of
right-of-use assets
|
|
(1,818)
|
|
(885)
|
|
(2,703)
|
|
Segment
profit
|
$
|
29,694
|
$
|
19,672
|
$
|
49,366
|
|
Special
charges
|
|
|
|
|
|
(383)
|
|
Corporate and shared
service expenses
|
|
|
|
|
|
(8,284)
|
|
Results from
operating activities
|
|
|
|
|
$
|
40,699
|
About Enghouse
Enghouse is a Canadian publicly traded company (TSX:ENGH) that
provides enterprise software solutions focusing on telehealth,
visual computing and communications networks. The Company's
two-pronged strategy to grow earnings focuses on internal growth
and acquisitions, which, to date, have been funded through
operating cash flows. The Company is well capitalized, has no
long-term debt and is organized around two business segments: the
Interactive Management Group and the Asset Management Group.
Further information about Enghouse may be obtained from the
Company's website at www.enghouse.com.
Conference Call and Webcast
A conference call to discuss the results will be held on
Friday, March 4, 2022 at 8:45 a.m. EST. To participate, please call
+1-647-689-4521 or North American Toll-Free +1-833-235-7649.
Confirmation code: 8096823. A webcast is also available at:
https://www.enghouse.com/investors.php.
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 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
based on results from operating activities adjusted for
depreciation of property and equipment and right-of-use assets, 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, foreign exchange gains and
losses, other income and restructuring costs primarily related to
acquisitions.
SOURCE Enghouse Systems Limited