Mr. Sam Anidjar reports

ENGHOUSE RELEASES FOURTH QUARTER AND YEAR END RESULTS

Enghouse Systems Ltd. has released its fourth quarter (unaudited) and year-end financial results for the period ended Oct. 31, 2023. All figures are denominated in Canadian dollars unless otherwise indicated.

Highlights for the fourth quarter ended Oct. 31, 2023, compared with the same period in the prior year:

• Revenue increased 13.9 per cent to $123.1-million;
• Recurring revenue, which includes SaaS (software as a service) and maintenance services, grew 35.0 per cent to $87.2-million.
• Operating profits improved from $33.1-million to $35.7-million, while achieving an EBITDA (earnings before interest, taxes, depreciation and amortization) margin of 30.8 per cent.

Financial highlights for the three and 12 months ended Oct. 31, 2023, compared with the three and 12 months ended Oct. 31, 2022, are as follows:

• Revenue increased to $123.1-million and $454.0-million, respectively, compared with revenue of $108.1-million and $427.6-million.
• Results from operating activities were $35.7-million and $122.1-million, respectively, compared with $33.1-million and $129.7-million.
• Net income was $25.1-million and $72.2-million, respectively, compared with $36.9-million and $94.5-million.
• Adjusted EBITDA was $37.9-million and $133.8-million, respectively, compared with $35.8-million and $140.6-million.
• Cash flows from operating activities, excluding changes in working capital, was $43.5-million and $140.5-million, respectively, compared with $37.7-million and $145.1-million.

In fiscal 2023, the company achieved a significant milestone by expanding its revenue, increasing its cash reserves and also deploying $55.2-million on acquisitions. It is pleased to announce record annual SaaS and maintenance services revenue of $297.6-million, an increase of $39.4-million or 15.2 per cent compared with the prior year. SaaS and maintenance services are an important strategic source of revenue characterized by their predictable and recurring nature. They now represent 65.6 per cent of total revenue for the year, compared with 60.4 per cent in the prior year.

The growth in revenue was accomplished through the expansion of the company's recurring SaaS revenue base, bolstered by new revenues from Qumu, Navita and Lifesize, all of which were acquired and successfully integrated in fiscal 2023, combined with positive impacts from foreign exchange rates in the year. This positive momentum was somewhat offset by declining software license revenue as the company sees increasing customer preference for SaaS solutions. Aligned with its commitment to provide its customers choice, the company is actively broadening the global availability of its SaaS offerings, particularly in its customer experience and contact centre technologies, where demand for SaaS is growing. Despite the industry shift, the company remains profitable, reporting results from operating activities of $122.1-million.

With cash reserves of $240.4-million and no external debt, the company continues to actively pursue opportunities to strategically deploy its cash reserves on acquisitions and return cash to its shareholders in the form of dividends.

Quarterly dividends

Today, the board of directors approved the company's eligible quarterly dividend of 22 cents per common share, payable on Feb. 29, 2024, to shareholders of record at the close of business on Feb. 15, 2024.

About Enghouse Systems Ltd.

Enghouse is a Canadian publicly traded company that provides mission-critical vertically focused enterprise software solutions. Its core technologies are used for contact centres, video communications, virtual health care, telecommunications networks, public safety and the transit market. The company's two-pronged growth strategy to grow earnings focuses on organic growth and acquisitions, which, to date, have been financed through operating cash flows as the company has no outstanding external debt financing. The company is organized around two business segments, the interactive management group (IMG) and the asset management group (AMG), due to their unique customer segments and technology offerings. Further information about Enghouse may be obtained from the company's website.

Conference call and webcast

A conference call to discuss the results will be held on Friday, Dec. 15, 2023, at 8:45 a.m. EST. To participate, please call 1-416-764-8646 or North American toll-free 1-888-396-8049, confirmation code 44260758. A webcast will also be available at the company's website.

The company uses non-IFRS (international financial reporting standards) 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 with similar measures used by other companies. Accordingly, they should not be considered in isolation. The company uses adjusted EBITDA, adjusted EBITDA margin and adjusted EBITDA per diluted share as measures of operating performance. Therefore, these collective adjusted EBITDA measures may not be comparable with 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.

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